STV forecasts ad spend increase in Q4

LONDON - STV, the Scottish ITV franchise, has added to the improving optimism around the TV ad market, forecasting UK TV ad spend will increase 2% in Q4.

STV: forecasts ad spend increase
STV: forecasts ad spend increase

The broadcaster said there has been "stabilisation" in TV ad spend across Q3 and Q4, with spend in Q3 at the same level as Q3 2008. In November and December, spend is expected to increase 3% and 5% respectively.

Over Q4, ad spend will rise 2% year on year, leaving 2009 TV ad spend down 11% year on year - ahead of earlier industry forecasts that tipped TV ad spend to tumble 15%.

Meanwhile, STV upped the ante in its ongoing legal dispute with ITV over alleged unpaid programming fees by STV. Earlier this year, ITV launched legal proceedings against STV to recover what it claims are up to £38m in unpaid network programme fees.

STV, which owns the ITV1 licences for central and northern Scotland, has increasingly opted out of ITV-produced network programmes, such as The Bill, to save money.

STV said today (6 November) it will submit a "robust defence", including a £35m counter-claim against ITV, alleging complaints over the way ITV plc handles STV's sales for UK-wide, non-Scotland airtime. "This counter claim relates to revenues STV should have received under its ad sales agreement," STV said.

STV has also extended its action with ITV to include a complaint about video-on-demand strategy. "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," said the company.

Rob Woodward, chief executive of STV Group, said the company has explored "numerous routes to engage with ITV" over the dispute, "but we have been left with no choice but to seek protection through the courts and we are confident our position will be upheld".

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."

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