U.K. broadcaster ITV is reducing its program budget by £100 million ($116 million) in the wake of restrictions imposed by the coronavirus pandemic.
In a trading update on Monday, ITV 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 has taken steps to reduce discretionary spending by $23 million in 2020, in addition to a $11.6 million savings planned for the year. ITV has also identified $35 million of savings in capital expenditure.
ITV has halted filming on popular shows “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,” ITV said in the update.
“We are implementing contingency plans to enable us to continue to produce as many programmes as possible, particularly our news output and live productions.”
For now, ITV will concentrate on its development slate and resume production whenever it becomes feasible.
The company has also decided not to pay the previously announced dividend. This step will ensure that $349 million of cash will stay within the business. “The board recognises the importance of the dividend to our shareholders and will consider the quantum of any interim dividend for 2020 in light of this and of circumstances at that stage,” ITV said.
“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.
“Our absolute priority is to protect our people, while trying to ensure that we deliver the news and programmes our viewers value and love to watch, and to keep them informed. We are actively taking measures to reduce costs and manage our cash flow so that we are best positioned to continue to deliver our strategy of building a digitally led media and entertainment company over the medium term.”
ITV has good access to liquidity, with $174 million of unrestricted cash, a $732 million revolving credit facility expiring in December 2023, of which $116 million is currently drawn, and a $349 million undrawn bilateral facility expiring in June 2021. The company has no bond repayments until September 2022.