STV and ITV on a ‘Collision’ course to the High Court

Author: By Matthew Bell

Midsomer Murders, The Bill, Doc Martin ? nearly all ITV’s mainstream dramas
have been pulled by STV in recent months, to be replaced by more
Scottish-specific content. So instead of Collision, Scotland was given The
Greatest Scot. While this may seem unfair to viewers, it has also enraged
ITV, which is suing STV for breach of contract. STV, it says, as the
network’s licence-fee holder, is obliged to air its programmes. Last month
it began legal proceedings to recover £38m, a debt it claims has accumulated
as a result of STV not honouring its contribution to the network programme

But STV is not about to hand over the cash. Last week it made a robust defence
of its actions and issued a counter-demand for £35m, money it says ITV owes
it from TV ad sales and video-on-demand rights.

The underlying problem stems from the conflicts inherent within a channel that
is at once independent but also the sole licence-holder of Scotland’s ITV
network, 92 per cent of which is owned by ITV. Since becoming chief
executive of STV two and a half years ago, Rob Woodward has made it clear he
wants to increase the channel’s regional content, as he told a Westminster
briefing last year, and is determined the channel should reflect the
interests of Scottish viewers.

As far as ITV is concerned, STV does not have the right to pull ITV shows when
it likes. It says it is a simple case of a licence-holder failing to meet
its obligations, and it is confident it will be proved right in court.

“They want to have their cake and eat it,” says an ITV spokesman, “Either STV
is in the ITV network, benefiting from ? in effect ? a volume discount for
taking the schedule, or it isn’t part of the ITV network and therefore pays
a market rate for those programmes it wants to carry. STV’s opt-out strategy
attempts to get the full benefits of being a member of the network without
carrying its fair share of the financial obligations.”

In the course of recent talks between the channels, it has emerged that both
want the same outcome ? a more distant relationship, like that between ITV
and TV3 in Ireland, which buys in ITV shows as and when it wants and is in
no way subsidised by ITV.

An STV spokesman says its decision to opt out of the schedule is reasonable,
given that the channel has no say in the contract. “We are not party to
decisions about the budget or the schedule, and are forced to accept what is
given to us,” he said. “We have no idea what is in next year’s schedule so
how can we be expected to agree to it?” But an ITV spokesman strongly
refutes that suggestion, pointing out that STV, like all licencees, is
represented on the ITV Council, when these decisions are discussed.

The row has been escalating for over a year, partly as a result of the
downturn in advertising. Before, if STV pulled a programme, it might not
have been so vigorously challenged, but now that ITV is running at a loss,
the channel is keen to enforce contract terms and recover any money owed.
STV is also attempting to save money, and last month the channel’s director
of content, Alan Clements, admitted that by not broadcasting ITV shows it
would save £4.5m this year. Clements added that the company was “cutting its
cloth sensibly” and making a profit while ITV had been posting losses.
According to another STV insider, ITV’s proposed schedule for next year is
already set to make a loss, and STV does not want to agree to it: “for us
it’s neither relevent or affordable..”

The real question is, what do the viewers want? Collision, or The Greatest
Scot? Figures for last Monday show that The Greatest Scot drew 13 per cent
of Scotland’s audience, with 257,000 viewers, while Collision drew 7.5
million of the UK audience, a 30 per cent share. Nevertheless, Woodward is
adamant that STV “must reflect the fact that Scotland is a devolved nation.”

The Department for Culture began a 12-week consultation earlier this month to
decide whether STV can qualify for independence. If it did, it would have to
pay market rates for ITV content, but it would have the advantage of
pitching commissions to other broadcasters, such as the BBC. Such an outcome
would seem to be welcomed by everyone, but until then, the only winners will
be the lawyers.

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