ITV cuts jobs, dividend after $3.8 bil loss
Program budget to be cut, businesses soldLONDON -- ITV executive chairman Michael Grade said the broadcaster has scrapped its growth targets, refocused its core programming mix toward entertainment and will cut 600 more jobs, after the company announced a 2.7 billion pounds ($3.8 billion) loss and revenue down 3% at 2 billion pounds ($2.8 billion) for 2008.
Grade said ITV will cut $198 million over two years from its $1.4 billion-a-year program budget and cut drama hours to make room for less expensive and higher-rating entertainment shows.
Grade said executives are working on re-engineering the schedule to cut original drama output by an hour a week to seven hours and to add midweek entertainment shows.
"We will focus more on peak time, move off-peak into peak time," Grade said. "There's an adjustment of the mix, with more entertainment midweek, which I think audiences are in the mood for -- they're not getting a lot of fun out of the news."
But he conceded that the solutions are not straightforward.
"There's no simple answer. (Director of programs) Peter Fincham and (COO) John Cresswell and the team are looking at the schedule over the next three years, genre by genre and cost by cost," he added.
ITV shares were down 3% at 23 pence (32 cents) on the gloomy news, which Grade said comes in response to a declining advertising market down 17% year-over-year.
Grade, a former CEO at Channel 4 and programming head for the BBC, described current trading conditions as "the most challenging I have ever experienced in over 30 years of broadcasting."
Grade said ITV's priorities "have to be aligned to the economic context," and abandoned targets of doubling online and global production revenue to $1.7 billion by 2012.
The broadcast group wrote down $3.8 billion of value in a non-operational goodwill impairment charge relating to the sliding value of its broadcast business, and saw its adjusted profit excluding the charge sliding 41% to $235 million from the same stage last year.
Financially, the broadcaster is abandoning its dividend payment and looking to offload its online networking asset Friends Reunited as well as the digital terrestrial channel operator SDN.