British broadcasters and agencies are struggling to resolve their differences and find common ground over creditworthiness criteria before the current round of negotiations reaches its April 1 deadline.
The sticking point is that of bank guarantees demanded by a consortium of commercial broadcasters: Carlton Communications, Granada Media, GMTV, Channel 4 and Five. The quintet recently rebranded from ITV Network Limited to TV Eye in order to reflect the membership of non-ITV companies and attract other broadcasters.
TV Eye wants agencies to have an equal debt to equity ratio in order to minimise their exposure to charges triggered by the rash of accountancy irregularities stateside. It also demands that agencies increase their credit insurance – a move the latter oppose on grounds that it will increase premiums to around £250,000 ($408,325; €376,232) annually.
In order to break the stalemate, the Institute of Practitioners in Advertising has proposed a compromise whereby agencies can opt to contribute to a mutual bond that will cover outstanding media debts if one of the member shops goes to the wall.
Data sourced from: BrandRepublic (UK); additional content by WARC staff