Carlton Devaluation Hits ITV Assets Hard

ITV, the UK’s largest commercial broadcaster, may be forced to knock £360 million off the value of its assets following a devaluation of regional operator Carlton, according to reports over the weekend.

ITV was formed in its present state by a merger between Carlton and Granada last year, although a report by the Financial Mail claims that a secret 27-page memo sent to the ITV audit committee, led by ITV chief executive Charles Allen, plunges the value of both broadcast firms into doubt.

At the time of the merger Carlton’s assets were valued at over £111 million, although it is understood that ITV now regards the same assets as liabilities worth £252 million, after debts of £1.6 billion owed to creditors are taken into account.

In addition, the Financial Mail claims that three Carlton pension schemes have deficits of nearly £100 million and that ITV’s balance sheet is not as strong as previously believed.

According to an ITV spokeswoman the devaluation relates to “goodwill” (the difference in the value of an asset and the price originally paid) and does not affect the company’s underlying valuation.

Last week it was revealed that ITV is considering a massive sell-off of non-core assets, a move which could raise around £600 million. The company’s performance also dipped during June, with ITV’s answer to Big Brother, high-profile reality-TV show Hell’s Kitchen, failing to boost the broadcaster’s share in all homes (see Digital Television Round-Up – June 2004).

ITV: 020 7843 8000 www.itv.com

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