Carat Dispute Overshadows Grade's Homecoming
LONDON: Michael Grade, like all successful tycoons, has had his share of luck. And thus, on Monday as the new executive chairman of ITV strode across the threshold of the broadcaster's Thames-side tower, a metaphorical black cat crossed his path.
Parking in the hide hotseat, Grade reached for his in-tray. And lo, topping the pile was a report that advertising bookings across the whole UK TV industry in January were ahead of forecasts - the first green shoots of recovery in a sector where bad news has reigned for the past year!
The report revealed that although a consensus of analysts and media buyers had forecast UK TV ad bookings would be (at best) flat for the whole of 2006 with a worst case scenario of minus 3%, they had got it wrong.
Or at least for the month of January!
And although there is uncertainty as to whether January is setting the trend or just bucking it, the initial numbers are looking better than expected, with growth predicted between flat and + 2%.
A single month - especially January - cannot be presumed to be typical but the 2006 trend of uninterrupted decline appears to have been halted, even reversed. That said, ITV, which is underperforming the market as a whole, remains in a delicate state.
January ad bookings for flagship channel ITV1 are reportedly down by around 5%, while estimated revenues for the company as a whole, including its digital channels, are likely to be down 2% year-on-year.
But even this compares favourably with last year's double-digit decline, a performance that dragged down the overall TV market by about 6%. During which time ITV not only lost share to its main commercial rival Channel 4 but also to the fast proliferating digital channels.
Ad revenues apart, Grade is said to have spent his first day attempting to inflate staff morale. Not only did he write a rah-rah letter to all staff, he granted an interview to ITV newscaster Alistair Stewart.
During this Grade homed-in on the imminent updating of ITV's website, which will enable downloading of programmes from the preceding thirty days. He promised ITV will "invest in and accelerate our drive to digital content provision and services" - an end to which he has already allocated £20 million ($38.8m; €29.8m).
Another less welcome item in the new chairman's in-tray is ITV's current dispute with Aegis Group's Carat media network. The parties are at odds over ITV's failure during 2006 to deliver its promised audience numbers.
Core channel ITV1 has accumulated an airtime 'debt' to Carat, after failing to deliver the audiences it guaranteed and for which the agency had paid. Such 'debts' are normally rolled over to the following trading season - but Carat is demanding to be repaid in cash.
If unresolved, the issue will be referred to communications regulator Ofcom for arbitration.
Its decision would set a significant precedent under the Contract Rights Renewal mechanism, introduced as a competitive safeguard when ITV plc was created by Granada's merger with Carlton Communications in February 2004.
Data sourced from The Times Online (UK) and BrandRepublic (UK); additional content by WARC staff