ITV, the embattled U.K. broadcaster, will hand back an additional £200 million ($360 million) in cash to stockholders and implement new savings of $180 million by 2008, including a $54 million cut in sports budgets.
Said ITV CEO Charles Allen, “ITV, with its strong brand, original content, Freeview capacity and cross-promotional capability, is uniquely well positioned to benefit, as the U.K. television market continues to fragment and the number of outlets and demand for high-quality content continues to increase.”
But it remains to be seen if these latest measures — introduced as ad revenues for the first half of the year are expected to show a decline of 4.6% to $1.35 billion — help lift ITV’s flagging stock price.
The company, which this week announced the closure of two of its production centers, including children’s, plans to spend an extra $36 million on multichannel next year, following the launch of a “+1” version of successful youth-skewed weblet ITV2.
As flagship station ITV1 continues to perform erratically, the broadcaster is attempting to drive new revenue streams from digital channels and other new-media entities.
The objective is for 50% of total revenues to come from sources outside ITV1 spot advertising by 2010.
Revenues at the digital channels increased by 42% to $124 million in the first half of 2006, but total revenues for the period are reckoned to be up just 2%.
In March, ITV successfully stopped a takeover bid led by veteran British TV topper Greg Dyke backed by private equity group Apax, but rumors persist of other predators stalking the broadcaster.
One being mentioned involves New York-based financiers Kohlberg Kravis Roberts.