Crozier will have little time for backslapping
THERE will be much to celebrate when ITV unveils fourth-year numbers on Wednesday. Advertising revenues recovered strongly, up some 16 per cent according to Numis, thanks to the World Cup and nascent economic recovery. Finance director Ian Griffiths has worked wonders on the firm’s balance sheet, with debt – which peaked at £730m in 2008 – now standing at around £324m; at this rate, the firm should be virtually debt-free by the end of 2011. More broadly, anecdotal evidence suggests the broadcaster is making structural progress: the commercial success of the X Factor has been matched by critical applause for shows like Julian Fellowes’ Downton Abbey and recent hit Marchlands (ITV simply wasn’t making TV this good a couple of years ago).
However, Crozier will have little time for backslapping when he addresses shareholders. The recovery at ITV is very much a work in progress, and one which has barely begun. Take ITV Studios, the firm’s in-house production business, which saw revenues fall nine per cent in the first nine months of 2010, proving the firm is still failing to make content that others want to buy. Revenues from ITV1, the firm’s tired cash cow, still account for two thirds of revenues, leaving it vulnerable should the advertising market come under pressure. Even if the advertising pie continues to grow, as most expect it to, ITV1’s share of it will gradually shrink as the multi-channel revolution and explosion in on-demand viewing gather pace.
ITV now benefits from a benevolent advertising market and much-improved financial position. On Wednesday, shareholders will want Crozier to start fleshing out his plan for that much needed “creative renewal”.