ITV Shares Nosedive As ‘Summer Of Love’ Turns Grey

Even Joe can't save ITV now

As nations the world over struggle to keep their heads above an economic tidal wave of woe and stunted growth, the channel that brings us Jeremy Kyle is foundering. Seems counter-intuitive, doesn’t it? Surely this is a time when the nation will be seeking out the best eyeball-gum the airwaves have to offer.

Not so, TV fans. ITV’s share price has fallen by almost 12% this week, with flighty investors spooked by a noticeable slump in ad sales and revenue predictions for July and August. Channel bosses have so far shrugged off the ominous lack of secured ad deals for the summer months, citing the Olympics and football’s European Championships as dead certs for deal-magnets. Optimistic analysts had even predicted a co-called ‘summer of love’ for the UK’s biggest advertiser-funded broadcaster, for heaven’s sake. Forecasting ad revenue rises of over 17% in June thanks to the footy and Jubilee celebrations.

Earlier this month, ITV big dog Adam Crozier, reported that he expected revenues to be up significantly year-on year, thanks to overseas sale of blockbusting shows such as Julian Fellowe’s Titanic. “We expect to outperform the TV ad market in the first half and for the year as a whole,” Crozier crowed, adding that a “strong autumn lineupâ€? would also help to boost revenues by 3% later in the year.

Earlier in the week, investor sentiment was still riding the wave of promise forecast by the seductively named ‘summer of love’ with shares hitting 80p on Tuesday. Since then we have seen a slide of 11.8%, winding up at a share price of 70.5p by midday today.

It now turns out that, according to some industry analysts, the Olympics – which were hotly-touted as a colossal source of summer income by channel bosses – were vastly overplayed in terms of their potential to draw in big money clients.

And if the rumour mill is to be believed, this is not a phenomenon likely to be restricted to the broadcaster of Loose Women and Daybreak – oh no – this could well be replicated by others in the field. “It is not about summer and the fact the Olympics is not bringing in money, there is something wider going on here,” said one senior executive at one of the major UK broadcasters. “There is concern across the board, I’ve been hearing of clients holding back everywhere.”

Separate investigations conducted by a number of City analysts have helped to prompt the share price slump, with the most disheartening outlook forecasting an overall TV advertising downturn of 10% this year. Broker Investec has now set a share price of 60p for ITV, given the gloomy summer ad revenue predictions and the channel’s dependence on outside income.

There could be salvation on the horizon with the most lucrative ad revenue month in Q3, September, looming. But even with the promise of higher audience figures and fresh material, early predictions put the market at best flat and perhaps 1% or 2% down year on year.

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