Granada Announces Cost-Cutting Measures as Ad Slump Shows No Sign of Let-Up

29 November 2001

Having posted dismal results for its fiscal full year and announced a further 430 job losses [WAMN: 28-Nov-01], British broadcasting group Granada Media has revealed further cutbacks in an attempt to cope with a slow first quarter.

For the three months ending in December, ad revenues are set to fall 11.7%, continuing the trend of a 12% decline over the twelve months to September, though still a good deal better than some analysts predicted. No improvement is expected in January.

Aside from the job losses – which total over 1,000 in the last year – Granada unveiled further money-saving measures. An “absolute priority,” said executive chairman Charles Allen, is reducing the “unacceptably high” level of investment in cash-haemorrhaging dTV platform ITV Digital, as well as extending the distribution of the ITV Sport channel – still not available to the 5.5m subscribers of number one dTV service Sky Digital.

Granada intends to slash its investment in ITV Digital (which it co-owns with Carlton Communications) by at least £104 million in 2002, which Allen said would be found by freezing pay and cutting marketing spend, subscriber management costs and head office expenditure.

Other restructuring at Granada, the largest shareholder in commercial network ITV, includes closing the Wellbeing channel, a joint venture with healthcare retailer Boots, which has notched up losses of £31m in under a year.

Nevertheless, Allen remained positive: “When the upturn comes and ad revenues rise television will be the first to benefit. ITV’s revenue is leading the cycle and the changes we have made will ensure that Granada is well placed to benefit from being the lowest cost and most efficient producer broadcaster in Europe.”

News sources: Financial Times;