London Business School: David Currie, outgoing Ofcom (UK broadcast/digital regulator) chairman. Continue reading
Tag Archives: ITV
PR — good for CEOs, lousy for share prices…
PR Week picks up on a Citigate report that puts numbers on the PR successes of CEOs in 2007.
The all-male, winning line-up? Continue reading
Two views of ITV
James Murdoch bought ITV shares for 135p not too long ago. Now, you and I can pick them up for about half that.
Murdoch didn’t exactly buy them hoping them to make a quick buck. But now he has moved to Wapping, how does one of his papers cover the ITV story? Dan Sabbagh plays a pretty straight bat laying out the territory in the Times:
On fundamentals, ITV is expensive, even at these superficially bombed-out levels. The shares trade at 14 times earnings, a premium to European peers, and there are real worries that the high street advertisers on which ITV depends will start to rein in advertising as the economy tightens.
That has not happened yet, but economic sentiment is so poor that the worry is that dependence on retail advertising is a weakness waiting to be exposed, rather than a strength.
However, most quoted European broadcasters cannot be bought, because they are tied up with a strategic investor; ITV is the exception. For that reason alone, ITV, with its unique dominance of British commercial broadcasting remains a compelling investment.
So far so reasonable.
Yet for anybody willing to take a view, it is obvious that Sky’s shareholding has more value sold in a block to a would-be bidder. It is also clear that there is long-term strategic value in the stock. Television advertising may be difficult in 2008, but it will improve at some point.A recovery in 2010 would be felt by investors from mid-2009. Meanwhile, ITV’s competitive environment is relatively benign. Neither the BBC nor Channel 4 is stealing viewers and 88 per cent of households have switched to multichannel. A bid may not be on the agenda yet, but it will come. ITV shares look attractive for the patient investor who believes that the economy will not collapse. Buy.
Hmmm.
Here is the FT’s take:
With its shares trading at half the 135p price BSkyB paid, ITV looks at first glance like low-hanging fruit…Even at 67.9p, up 3.9p yesterday, ITV “is still more expensive than most other western TV companies”, one investment banker said yesterday. “You can’t raise the debt.”
With an equity value of £2.7bn and £668m of net debt at the end of December 2007, ITV is out of reach of any bidder that needs to tap tightened credit markets…
The bigger uncertainty, according to one executive who has examined ITV, remains the regulatory régime, which restricts how much ITV can charge its advertisers. Although the Office of Fair Trading is reviewing the contract rights renewal régime, any relief is unlikely to be felt until 2010..
Buy, hold or sell?
In the shorter term, ITV remains “on the cliff” of losing its investment grade rating, according to Christian Rauch, an analyst with Moody’s, which last month rated the group Baa3 with a negative outlook.Should anything knock ITV’s bonds into junk territory, any prospective buyer may yet be able to strike at a lower price.
Breaks off News At Ten
News At Ten returned. With no commercial break. Deliberate? Permanent? Odd feeling in what was otherwise a very familiar programme package (well, I did work on it years ago). But down to business. You want an old-fashioned critique of an old-fashioned show? Start with the Bongs (the headlines).
Edmonds after Diana felt like too much crime at the top, and going through the show you have a lot of crime in the faux part one. 1. Hasnat Khan speaks — Neil Connery VT 4. Wrap: Ipswich murder/Peter Hain/Weddell reax 5. Edmonds murder — Penny Marshall VT Still to come: Capello/Lifeboat rescue
2. Diana inquest — James Mates VT
3. Northern Rock — Tom Bradby VT + live
[Place where the break should have been…]
6. Special Assignment — Bill Neely VT + live
Promo: Neely vlog
7. Capello — Geraint Vincent VT
Recap
8. Lifeboat Rescue — Tim Rogers VT
So seven packages, two lives and a wrap — two of the packages themed, “Special Assignment” plus “And finally.”
The style was spare and unintrusive. Khan was a good get, but needed some context to shake the dust off his rather dull pronouncements. Diana going to live in Pakistan! Tell me more…
The story balance made it feel a little too crime-time for prime time. The Neely vlog promo (which looked interesting) was given a lacklustre promo. But a very simple, clean, deliverable programme.
The Lifeboat Rescue felt awkward as an “And finally.” Not exactly life-affirming — more an RTA on an international sea lane.
The only thing it lacked was a little of wit. Doubtless that will come with time. The big audience test will come on day two. For ITN’s sake, I hope it works.
There’s not much not to like here — which isn’t to damn with faint praise, but simply to point out that with news viewers the less you can do to drive them away, the more will stay. But like battery chickens, the odd surprise is good for them.
You can watch the Beeb alternative here. The set piece is John Simpson in Zimbabwe. Big old name plus big international story leading equals statement of intent, and a conservative reply to a conservative challenge.
P.S. Re-read John Hockenberry’s cry of pain — You Don’t Understand Our Audience — in case you think any of this really will shore up the crumbling edifice.
Michael Grade’s ITV — now 20% smaller!
Back on 28 November 2006, when Michael Grade walked in to 200 Grays Inn Road to take the ITV helm the share price stood at 110.75p. Today it was just 89.1p. That’s a drop of just under 20 percent, or as we say in journalism — nearly a fifth.
Of course, share prices can go up as well as down, and ITV should be looked at as a long term investment. Besides, it will take at least another year for Grade’s reforms to take effect. By which time we’ll all probably be able to buy it.
ITV: Michael Grade’s “Midas” touch
Michael Grade. The scorecard so far:
“I started my career there [ITV] and I worked there for just under 10 years. Whether or not I end my career there, who knows?”
“Maybe ITV are pandering [to Ofcom to get CRR changed], but if they think that is the price to get CRR changed it could be too great a price to pay over what they might lose on-screen, it might cost a lot of audience,” [Chris Locke, the UK group trading director at media agency Starcom Worldwide] argued.“The world has changed. People who want news know where to find it … people don’t buy plasma screens to watch news.”
3. Wipes out a chunk of the company’s share value
ITV’s share price closed on Friday at a year-low of 96.2p, valuing the company at £3.74bn. The share price has fallen from a high of 120.9p last May and the company has lost more than a third of its value since it floated on the stock market in 2004.
Doh! Time for a private equity bid.