UK broadcaster ITV has announced it will slash its programme budget this year, as well as cut other spending and not pay a 2019 dividend in a total savings package worth at least £300m.
The programme budget cut accounts for at least £100m of these savings and comes on the back of weakening spending from advertisers hit by the effects of coronavirus.
In a trading update, the company said, “This reflects savings from sport including the postponement of Euro 2020, the late delivery of commissioned programming and active decisions to reduce our spend.”
The company said it was putting in place contingency plans to produce as many programmes as possible, with a focus on its news output and live productions. It added that the developing coronavirus crisis made it too early to predict what this would mean for revenues and profits.
In a statement, the ITV said, “We have seen further deferrals in advertising which are now coming from across the advertiser categories rather than just in travel. The situation remains dynamic and therefore we are not in a position today to give guidance for March or April … Over a full year each 1% decline in total advertising revenue reduces revenue and profit by c.£17m, before any mitigation.”
The company has already stopped filming of its popular soaps, Coronation Street and Emmerdale.
“We have had to pause a significant number of productions in the UK and internationally, which we are doing in a systematic manner to ensure that we are well placed to resume production as soon as we are able to and to minimise the costs of disruption,” the statement added.
The production cuts will be offset to a certain extent by increased demand for library sales, the company said.
“As a leading global distributor, we are well placed to deliver this, with a high-quality library and strong relationships with broadcasters and platform owners,” ITV said.
And the company added that, when conditions allowed, it was well placed to quickly ramp up production of unscripted content, which has a shorter lead time.
“We are operating in unprecedented and uncertain times, requiring us to take difficult decisions, plan carefully and act with speed,” Carolyn McCall, ITV Chief Executive, said.
Sourced from ITV