ITV says it expects to see ad growth as revolt fizzles out

LONDON – ITV said that it expected to see advertising growth in April and May as it saw off criticism from shareholders over £15m in controversial payments to former Carlton boss Michael Green.

Almost 20% of investors, or one in five, abstained or voted against the three former Carlton directors who authorised £15m in payments to the ousted Carlton chairman Michael Green.

Some shareholders had called for the three -- John McGrath, Etienne de Villiers and Sir Brian Pitman -- not to be re-elected as board directors, but in the end more than 80% of shareholders backed their appointment to the ITV plc board.

Chairman Sir Peter Burt told shareholders at the AGM today that lawyers had advised the company to make the pay-outs, which comprised £1.8m in cash and £13.2m in options and shares.

The UK's largest commercial broadcaster said that it expected to see advertising revenue at its main ITV1 channel rise by around 2.5% in April and May.

The news was not as good as expected and ITV shares dipped this afternoon and were down by as much as 1.54% to 128p before recovering slightly, down 0.77% or 1p to 129p.

Sir Peter said: "Since our recent results and trading update on March 3 the businesses have continued to perform satisfactorily."

He said that ITV1's net advertising revenue in the quarter to March 2004 was flat on last year with total advertising revenue up just 1%.

Over at digital station ITV2, which faired well with programmes such 'I'm a Celebrity... Get Me Out of Here!', advertising revenue was up 50% in the year to date, albeit from a low base.

Earlier this year, ITV was in dispute with media agency MediaCom about the volume of TV ad budget to be allocated to ITV2.

MediaCom had been unwilling to commit as large a proportion of its clients' budgets to ITV2 as ITV demanded. MediaCom called in the Ofcom adjudicator, David Connolly, to judge the terms of the deal that ITV had presented to it.

A compromise was reached and ITV2 will now carry some advertising from MediaCom clients.

The dispute was partly a factor of the merger of Carlton and Granada. Prior to the sales houses coming together, ITV2 was sold separately but it has now been absorbed into the main sales team.

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