UK-headquartered media conglomerate ITV has issued a trading update, detailing measures the company is taking to stem the impact of the coronavirus upon its various sectors.
In light of a weaker advertising climate, the company is planning on reducing its programming spend by “at least £100m (US$116 million). This reflects savings from sport including the postponement of Euro 2020, the late delivery of commissioned programming and active decisions to reduce our spend.”
The company is also aiming to reduce discretionary spending by £20 million in 2020. Given the current uncertainty facing the global entertainment industry in the wake of the pandemic, the company says it will also be withdrawing its market guidance for 2020.
Regarding the Studios sector, the company says recent restrictions on working practices are having a “significant impact” on the ability to produce content.
“We have had to pause a significant number of productions in the UK and internationally, which we are doing in a systematic manner to ensure that we are well placed to resume production as soon as we are able to and to minimize the costs of disruption,” the company said in its update. “We are implementing contingency plans to enable us to continue to produce as many programmes as possible, particularly our news output and live productions. It is too early to quantify the impact of this on ITV Studios’ revenue and profit. This depends on how long the restrictions are in place.”
With its global distribution arm and catalog, the company expects to offset some of the financial disruption stemming from the production halt. Also, with its significant unscripted slate, the company expects to be able to pick up its production pace once given the go-ahead.
“Demand for quality content remains strong and therefore we continue to work on our development slate and we are ready to resume production as soon as we are able,” the update offered. “As one of the largest international producers of unscripted content which has a shorter lead time, we will be able to ramp up production quickly.”
“We are operating in unprecedented and uncertain times, requiring us to take difficult decisions, plan carefully and act with speed,” said Carolyn McCall (pictured), ITV chief executive, in a statement. “Our absolute priority is to protect our people, while trying to ensure that we deliver the news and programmes our viewers value and love to watch, and to keep them informed. We are actively taking measures to reduce costs and manage our cash flow so that we are best positioned to continue to deliver our strategy of building a digitally led media and entertainment company over the medium term.”