STV predicts 2% Q4 ad revenue increase
The Scottish ITV licensee STVis predicting a 2% rise in national television ad revenues in the fourth quarter.
Ad revenues in November are forecast to be up 3% with December up 5%, while Scottish ad revenues in the fourth quarter revenue are expected to be flat.
And following ITV’s legal action against the Scottish franchise to recover a £38 million debt, launched earlier this year, STV said today that it will submit a robust defence, including a £35 million counter-claim.
In a statement, STV said: “This counter claim relates to revenues which STV should have received under its Advertising Sales Agreement. As previously announced, on the 5% of related revenuewhich STV’s independent auditor Deloitte was able to review, a potential shortfall of approximately £2 million (covering only 30 months of a six year period) was identified. This defence and counter claim will be submitted by 13 November 2009.
“STV is expecting to file further claims regarding ITV’s abuse of video on demand rights and significant prejudicial behaviour on the part of ITV Network and ITV plc.”
In response, an ITV spokesman said STV is “attempting retrospectively to opt out of an increasing number of peaktime programmes which contravenes existing agreements”.
The spokeswoman added: “STV is also wrongly attempting to claim a rebate against programmes which have been ‘written off’. We are currently withholding monies from STV against this debt and currently believe the net debt is approximately £15 million to £20 million.
“We have been attempting to resolve this matter for more than a year but unfortunately our efforts have been unsuccessful. Given that we are a commercial organisation, with responsibilities to our shareholders, we were left with no option but to take legal action to recover this sizeable debt.
“ITV commenced legal proceedings against STV in September to recover a gross debt of £38million. This debt has accumulated as a result of STV not honouring its contractual contributions towards the Network Programme Budget.
“As we stated in September, a substantiated shortfall has not been identified relating to revenues associated with the Advertising Sales Agreement and we are firmly of the opinion that STV has no grounds whatsoever to demand payment. We have been co-operative and supplied all documents relevant to the review which, in any case, we believe to be flawed. We will defend this claim vigorously together with any other related action which STV should choose to launch.”