ITV Freezes Programming Budget as BBC Boss Backs Merger Plan

27 August 2003

British terrestrial broadcaster ITV is freezing the programming budget of flagship channel ITV1.

Granada and Carlton Communications – the network’s two dominant shareholders – will keep ITV1’s spend at £835 million ($1.3 billion; €1.2bn) in 2004. Last October, the duo hiked the 2003 budget by £100m [WAMN: 01-Oct-03], but ongoing ad weakness prevents any such boost next year.

Announcing the decision, ITV1 director of programming Nigel Pickard insisted the freeze would not hinder the channel’s performance.

However, arch-rival BBC1 – owned by the publicly-funded BBC – now spends around £1bn annually. It overtook ITV1 in terms of audience share two years ago and has maintained its lead ever since.

But despite the ratings rivalry between the two channels, the BBC’s director general Greg Dyke has called on the government to help strengthen ITV.

Speaking at the Edinburgh International Television Festival, the BBC boss backed Granada and Carlton’s proposed merger, calling on regulators to allow the combination of the ITV duo subject to reasonable terms.

Dyke believes a strong ITV challenging the BBC and Rupert Murdoch’s satellite operator BSkyB will create a balanced TV market. But to secure ITV as a healthy, ad-funded, free-to-air broadcaster needs a change in attitude by the authorities.

“If governments and regulators want to preserve some of the best features of commercial broadcasting in this country they will have to change their approach,” Dyke commented. “They will have to make it commercially attractive for ITV to remain a public service broadcaster.”

That said, the BBC chief insists ITV has nobody but itself to blame for its current predicament, having made poor programming decisions and spent unwisely on digital TV and sports rights.

Dyke’s zeal for a strong ITV may reflect a desire to limit the growing power of BSkyB. His comments coincide with an increasingly public war of words between the satellite operator and the BBC.

Data sourced from: BrandRepublic (UK); additional content by WARC staff