TVS Confirms Bid

TVS has bid £54.1m for its licence, thought to be almost £20m ahead of its nearest rival.

TVS believes it can sustain the bid, predicting a growth in national ad revenue of 11.7% between now and the end of 1992, and a growth of 5.7% per annum for the following five years. The company therefore expects to make a pre-tax profit of £1.1m in 1993, reach- ing £38m by 1997.

These predictions have been dismissed by analysts as far too optimistic. Forecasters at James Capel are assuming a 2.6% yearly growth over the licence period. This would mean pre-tax losses of £20.5m in 1993, followed by losses right up until the end of the century.

The ITC now has to decide whether TVS’ financial plan is adequate enough to meet its programming proposals. Challengers for the franchise (CPV-TV, Carlton and Meridian) intend to apply for a judicial review if TVS is awarded the licence; the Broadcasting Act prompts the ITC to reject a bid if the company does not have enough money to fulfill its programme commitments.

TVS is currently seeking shareholder approval for a £30m financial restructuring involving Time Warner and Associated Newspapers. Shareholders have been told that they cannot expect a dividend until 1994.

The company has, however, set aside £6m to award to senior management should the franchise be retained.