ITV, the biggest commercial broadcaster in the UK, has announced a fresh round of job cuts and has sought a relaxation in regulatory burden of mandatory public service programming as it wrote down the value of its broadcasting businesses by £1.6 billion after a massive £1.54 billion first-half loss.
ITV has sought help from the UK broadcasting regulator Ofcom to cut down on its public service broadcasts because of a slump in advertising.
Executive chairman Michael Grade said ITV would have to hand back its public service licence if its regional news requirements are not eased. He said the full force of the advertising recession would hit ITV in September, predicting a worse than expected 20 per cent drop in channel revenues against the expected television industry loss of 17 per cent.
ITV said it cut the value of all its broadcasting businesses, including Meridian, Anglia and HTV, by £1.6 billion due to a drop in advertising bookings for September and fears that the economic downturn will continue well into 2009.
The broadcaster, which revised down two of the turnaround targets last year, has now cut expected revenues from £1.2 billion by 2012 to £1 billion. It also pushed back the online division's revenue target of £150 million by 2010 to 2012.
ITV's losses were also in part to regulatory delays in the launch of its Kangaroo internet TV joint venture with Channel 4 and the BBC.
The £1.5 billion pre-tax loss prompted Standard & Poor's to downgrade ITV's credit rating to junk status, thus adding £8 million a year to the group's interest bill.
ITV was created by Charles Allen by merging independent broadcasters such as Meridian and Carlton into a single commercial television behemoth. It has lost much of its value with the rise of hundreds of new channels.
With the recession taking a toll on advertising revenues, ITV now expects the value of its assets to be just £1.3 million, down £1.6 million earlier.