ITV the UK commercial channel has reported a worse than expected loss of £2.7bn (E3bn) after massive write downs on its assets. Its operating profit was £167m down 41% on 2007 with virtually all the damage done in the second half with a collapse of advertising revenue. ITV estimates Q1 09 advertising will be down 17% year on year and things will get worse from there. The company is making 600 job cuts, closing studios and selling off 'non-core' assets. There will also be at least £65m cut from programme budgets; several expansive dramas have already been abandoned.
Chairman Michael Grade said: “Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting.”
The acute decline in revenue is down to the recession but by its own admission ITV has struggled to recover from the unmitigated disaster of ITV Digital the DTT venture that lost £1.2bn, its underdevelopment of dotcom and its misguided strategy after over spending on Friends Reunited and the like, and its late arrival with additional digital channels.