ITV hit by post-Brexit ad dip

UK commercial broadcaster ITV is predicting a further fall in advertising revenues as uncertainty around Brexit continues to make advertisers “cautious.”

ITV CEO Adam Crozier

ITV is suffering its worst performance in the lead-up to Christmas in a decade. Net ad revenue was down 4% in the third quarter and the broadcaster has warned that it will decline further across its channels by 7% in Q4, which includes the festive period when advertisers usually increase their spending.

“In recent weeks the political and economic uncertainty has increased and we are currently seeing more cautious behaviour by advertisers,” said ITV chief executive Adam Crozier.

The 7% revenue drop marks ITV’s worst year-on-year fall since the company posted a 9% fall in Q4 2008.

ITV has already announced it is planning to shed 120 jobs due to economic uncertainty following the country’s decision to leave the European Union.

C21 reported yesterday that the broadcaster was cutting the role of commissioning editor for entertainment held by Kate Maddigan as part of cost-savings measures.

The news came three months after Crozier said the firm would have to save £25m (US$31m) following Brexit.

However, ITV said its Studios production operation was performing strongly and was helping reduce its reliance on advertising. Revenues at ITV Studios were up 18% at £923m, from £782m in 2015, with 162 new commissions and 139 recommissions heading into 2017.

Crozier also said he expects TV advertising revenue for the full year to be down 3% but expects ITV to outperform the overall UK TV ad market.

But he also said ITV’s £1bn programming budget would be £25m lower next year due to fewer major sporting events taking place.

Crozier added: “We are on track to deliver £25m of overhead cost savings in 2017 as previously announced and, due to the absence of any major sporting event, the NPB will be £25m lower in 2017 whilst maintaining the strength and depth of our schedule.”

Analysts at Citi said a 20% drop in ITV’s share price in the past two months reflected falling expectations.

ITV recently cut its drama team, making commissioning editors Charlie Hampton and Sarah Conroy redundant. The company also dropped its corporate broker JP Morgan and took on Citigroup following its failed attempt to buy production and distribution giant Entertainment One.