Sharewatch: ITV Rises As Ofcom Mulls Licence Fee Cut

The UK’s largest commercial broadcaster ITV was seen in focus yesterday as news came of a potential windfall for the company if media regulator Ofcom goes ahead with proposals to cut its licence fee by more than 40%.

The broadcaster rose by 2.84% yesterday to close at 117žp, as investors heard how renegotiations with Ofcom could give ITV a much-needed boost to profits. Reports suggest the broadcaster could face a deficit of around £100 million in revenue as advertisers seek to negotiate more competitive deals following its recent decline in audience share, a situation that may be offset by any saving in licence fee (see ITV Could Receive Boost From 40% Cut In Licence Fees).

Elsewhere, global advertising group WPP saw a dip of 0.87% as chairman Philip Lader described continued growth in the US advertising market but tough conditions in Western Europe, particularly in France, Germany and the United Kingdom (see WPP Says Conditions Remain Tough In UK).

Daily Mail & General Trust managed a slight rise of 0.83% yesterday as Richard Desmond released more details of his planned free London newspaper. The newspaper tycoon’s latest offering will be in direct competition with DMGT’s Metro and Evening Standard newspapers, putting pressure on both brands in the increasingly crowded commuter market (see Desmond Eyes New Name For Planned London Free-Sheet).

The FTSE 100 rose by 0.6% yesterday to close at 4,518.7 as the early handover of Iraq boosted optimism among London equity markets. The FTSE 250 also closed higher, rising by 0.4% to 6,252.6.

The closing prices of media company shares on Monday were: