ITV the unloved sibling of British broadcasting as shares tumble just two days after Comcast moves in on Sky

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While Sky is the school football star who everyone wants to be mates with and has a sheaf of scholarship offers from top US colleges in their back pocket, ITV is the unloved sibling looking at a McDonald’s apprenticeship. 

Poor Carolyn McCall. It can’t have been much fun for the newly minted CEO to have to say “look at me, look at me” just a couple of days after everyone wanted to shake the golden child’s hand. 

Worse still, when the family did look at Britain’s other big commercial broadcaster they all said “eeeuuww”. Even the doting aunt with a soft spot for it. 

The shares fell out of bed and landed hard on a cold floor in snowy Britain. Advertisers have taken note of the icy economic prospects delivered by the rubes in charge at Westminster and decided that splashing out isn’t a good idea. Best off putting the spare change to good use digitally. 

ITV is supposed to show growth in ad spend the first quarter of this year but there was a fall in January and February doesn’t look good. The salesforce is going to have to go like Lizzy Yarnold on a South Korean Olympic skeleton track in March to make the grade.  

ITV Studios, which has proved to be a shrewd investment, is still growing nicely it’s true.

As one analyst noted, the margins produced by that business aren’t fancy, but really, margins oughtn’t to the first concern about a division that represents ITV’s future. If it has one. 

It should be said, too, that the company has a rather nice online business and it’s doing just fine thanks very much. 

But when your CEO starts indulging in corporate-speak – “we are very focussed on our strategic refresh” – it’s time to start worrying.

To be fair the results weren’t terrible, although a 6 per cent fall in profits can’t ever be considered as good. The annual dividend is rich, and was hiked by 8 per cent, but there was no special payment this year so the total fell. 

The sensible investor should see that as a good thing. This is a business that needs to put the money it’s still making towards investing in its future. Trouble is “sensible investor” might be an oxymoron on the London market. 

There will be a bung coming from the World Cup in the summer. People will watch even if England’s players prove to be as disappointing as they usually are and give the other home nations something to laugh about. Soccer’s premier tournament is still the sort of big sports set piece that is all but guaranteed to produce a mass audience. In four years time it might be the only thing capable of delivering a mass audience. 

That’s what Ms McCall’s “strategic refresh” has to address, because there’s no bidder on the horizon to solve ITV’s problems for it. Sky has Comcast, Disney and Fox fighting over it because it doesn’t have those problems and it doesn’t need a refresh, strategic or otherwise. 


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