ITV has set out the steps it is taking to protect the business from the coronavirus chaos, which the British broadcaster says is wreaking havoc on its two key sources of revenue: Its production arm and the advertising market.
In an update on Monday, ITV CEO Carolyn McCall told investors that the company is operating in “unprecedented and uncertain times,” which have required it to make quick and difficult decisions about its future.
As the stability of its revenue has been called into question, meaning it has scrapped all previous forecasts for 2020, ITV said it plans to slash its program budget by £100M ($116M) this year.
Much of this is a result of Europ 2020 not going ahead, as well as the “late delivery of commissioned programming and active decisions to reduce our spend.” ITV has also identified a further £60M of savings in areas such as “discretionary” spend and capital expenditure. ITV has also withdrawn its dividend plans, which together with other savings means that it expects more than £300M of cash to be retained within the business.
ITV’s share price dropped nearly 10% on Monday morning to 56.98p and is bumping around at some of its lowest levels in a decade — a darker period for the company before former CEO Adam Crozier transformed it into a production giant that was no longer totally dependent on TV advertising.
As part of the coronavirus changes ITV is making, the broadcaster shut down production on its soaps — Coronation Street and Emmerdale — over the weekend. “We have had to pause a significant number of productions in the UK and internationally, which we are doing in a systematic manner to ensure that we are well placed to resume production as soon as we are able to and to minimize the costs of disruption,” ITV said Monday. “It is too early to quantify the impact of this on ITV Studios’ revenue and profit. This depends on how long the restrictions are in place.”
On a brighter note, ITV added: “We expect to benefit from an additional offset due to increased demand for library sales. As a leading global distributor, we are well placed to deliver this, with a high quality library and strong relationships with broadcasters and platform owners. Demand for quality content remains strong and therefore we continue to work on our development slate and we are ready to resume production as soon as we are able. As one of the largest international producers of unscripted content which has a shorter lead time, we will be able to ramp up production quickly.”
Alongside the trading update, ITV published its annual report, which revealed that McCall was paid £3.8M last year, including a bonus.