ITV Is a "Consolidator," Expects Better Year for U.S. Studio Arm, CEO Says
Adam Crozier on an earnings conference call also spoke about planned U.S. SVOD service BritBox, succession planning and how Brexit is affecting U.K. advertising.
U.K. TV giant ITV expects 2017 to be a better year for its ITV America production arm and continues to see itself as a buyer rather a seller as the industry continues to consolidate, CEO Adam Crozier said on the company's full-year earnings conference call with reporters Wednesday.
ITV America posted a 27 percent revenue drop for 2016 as two shows – Texas Rising and Best Time Ever – didn't return and Hell's Kitchen was not delivered last year, but will return for two seasons in 2017.
"America was the area performing least well last year," Crozier told reporters. "We expect to show really good growth in America from a revenue point of view this year." He added: "We have got lots of new shows coming through, including some new scripted shows, and we expect to have a very healthy year in America this year."
ITV in 2015 restructured the U.S. studio arm and named Brent Montgomery CEO of ITV America.
Crozier on Wednesday also reiterated that ITV continues to see itself as a consolidator instead of a takeover target. "We are in very good shape, and I think we are very much a consolidator in the sense that we have been very clear that we will continue to look at M&A as a way of accelerating delivering our strategy," he said. "I think scale is becoming more important, and I think diversity of revenue streams is becoming more important.”
With ITV having in 2016 approached Entertainment One about a takeover, one question on Wednesday was whether ITV could revisit that. "We have no interest in pursuing Entertainment One," replied Crozier.
But he said "we have a good, healthy pipeline of [M&A] opportunities," particularly as far as TV production firms go. He signaled continued interest in production companies in various parts of the world. “One of the things I’m extremely proud of is that those people have all stayed with us," said Crozier about creatives who joined ITV in past deals. "People enjoy working with us.”
There has been recurring talk about a possible acquisition of ITV by a U.S. company since John Malone's Liberty Global first bought a stake in ITV. Some have suggested that Liberty Global, which currently owns a 9.9 percent stake, or Discovery Communications, in which Malone also owns a stake, could look at buying control of ITV.
Asked about recent reports that ITV has started succession planning for whenever Crozier leaves his post, the CEO on Wednesday didn't say how long he was planning to remain. But he said: "It would be very unusual for any company anywhere … not to be making sure that hey have some kind of succession in place.”
Crozier also discussed upcoming SVOD service BritBox, a joint venture between ITV and the BBC, with AMC Networks also involved. “We will be launching BritBox in the U.S. over the next few weeks and will announce the price point," he said, promising the "most comprehensive" British streaming service on the market. “It will give us access to a fast-growing SVOD market in the U.S.," he said about the strategic opportunity. "British content does extraordinarily well in the U.S."
The companies have said they expect to roll out the service in other countries following the U.S. debut.
Asked about ITV's comment earlier in the day that early 2017 advertising revenue would be down 6 percent amid "economic uncertainty," Crozier cited the Brexit and “concern around inflation," driven by the weaker pound since the Brexit vote in June. While he wouldn't predict when the uncertainty would end, he said he expected it to be a "short-term blip" in the bigger picture. "The economy is in reasonable shape."
"TV advertising is in good health" and remains "very cost-effective," he highlighted when asked if there was any underlying concern about the outlook for television amid a rise in digital ad spending. "TV is, if anything, reasserting its importance for advertisers."