Newspaper article The Evening Standard (London, England)

Watchdog's Refusal to Scrap Rules on Ads Is a Turn-Off for ITV Shares

Newspaper article The Evening Standard (London, England)

Watchdog's Refusal to Scrap Rules on Ads Is a Turn-Off for ITV Shares

Article excerpt

Byline: Mickey Clark MARKET ROUND-UP

SHARES in Coronation Street broadcaster ITV dropped 3.1p to 49.5p today after the Competition Commission said it won't scrap advertising rules put in place when Carlton and Granada merged six years ago.

ITV chairman Michael Grade had argued that the rules, which safeguard how much advertisers have to pay for slots on the flagship channel ITV 1 depending on its audience, were out of date given the rise in digital TV and other ways people watch.

Since the so-called contract rights renewal (CRR) system was introduced in 2003, ITV1's share of the TV advertising market has dropped from more than 50% to about 36%.

The Competition Commission said that, while it won't scrap the system, it may tweak it to take into account ITV's digital channels and "unintended effects" it produced.

Analysts are worried a final decision won't come in time for this year's advertising-rate negotiations with big airtime buyers.

Numis Securities says: "The wording of the statement is tougher than we expected at this stage, and indicates that CRR will not be abolished in its entirety."

It continues to rate the shares a hold to reflect the recent strong performance by the shares this year having trebled from their March lows.

Citigroup describes the outcome of the Competition Commission as "disappointing", with it making a number of fairly conclusive remarks, but leaving a small possibility of further change.

Shares generally pressed ahead after a slow start as investors marked the first anniversary of the Lehman Brothers collapse which was seen as the tipping point for the banking meltdown and subsequent global recession.

Leading shares consolidated their position above the 5000 level in another day of thin trading. The FTSE 100 index posted a rise of 23.15 points to 5042 as the inflation rate slowed from 1.8% in July to 1.6% in August. This was its lowest since January 2005, but above the 1.4% being forecast in the City.

Trading in New York was choppy. The benchmark Dow Jones fell 34.69 points to 9592.11.

On this side of the Atlantic, the early impetus was provided by the miners supported by a rally among raw material prices. …

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