ITV chief executive Dame Carolyn McCall has issued a stark warning that the second half of 2022 will prove “hard” for the British broadcaster, placing blame on a pronounced advertising revenue downturn amid a “stagnating” UK economy as well as politicians focused on imminent elections rather than implementing policies to stimulate growth.
Speaking Thursday at a media conference hosted by the Royal Television Society in Cambridge, McCall told attendees that ITV will likely be “dragged down” by severely depressed advertising income over the remainder of the year.
The London-listed media company had already sounded the alarm over the worst advertising market conditions witnessed in more than a decade within its most recent financial results. However, McCall noted that predictions from economists of a recovery materializing in the second half of 2022 have thus far failed to come to fruition.
“It’s proving to be quite a hard second half…Advertising revenue will be a drag for us so all our results will be dragged down,” she commented. “The UK economy is not doing very well.”
McCall’s downbeat remarks came the same day that the Bank of England announced its decision to leave its key interest rate unchanged at 5.25%, following better than anticipated UK inflation data for the month of August.
Beyond the advertising slump, the ITV chief also unleashed sharp criticism targeted at the Conservative government led by Liz Truss, lambasting what she described as a glaring lack of policies designed to stoke meaningful economic growth.
“The thing that the government can do for the creative economy is to start growing the economy. They talk about growth all the time but…where are the initiatives to properly grow the economy?” she questioned.
McCall further expressed frustration that it now “feels like it’s a waiting game—everyone knows there will be an election” coming soon rather than forceful action from policymakers.
Earlier in 2022, ITV made waves after it pulled out of advanced talks to acquire production group All3Media, the company behind popular TV shows such as Gogglebox and Call the Midwife. All3Media is jointly owned by Warner Bros. Discovery and Liberty Global.
Speaking at the same Cambridge event, Liberty Global CEO Mike Fries revealed that a formal auction process for All3Media has now commenced. He noted that while ITV remains interested in buying the production giant after acquisition talks broke down, “pretty much everybody you can think of” has shown interest in acquiring the company. Liberty Global owns a nearly 10% stake in ITV.
Other potential bidders linked to All3Media beyond ITV include the likes of Banijay Group and Sony Pictures.
McCall reiterated Thursday that ITV is “monitoring” but not actively engaged in the All3Media sale process at this stage. According to those close to the earlier discussions between ITV and All3Media, the key sticking point that derailed talks was an inability to agree on valuation, meaning ITV could feasibly reemerge as a bidder depending on the prices put forth during the auction.
Analysts widely view All3Media as a natural acquisition target for ITV in support of its strategy to grow its production studios business to help offset struggles in its legacy linear TV operations. Owning All3Media could also better enable ITV to ascribe accurate valuations to its various business segments.
