UTV hits out at "unwelcome" subsidy claim

UTV has criticised ITV for creating "an unwelcome and unnecessary distraction" when executive chairman Michael Grade said the network was subsidising the regional channel.

In remarks made to the Royal Television Society last October, Grade said that ITV subsidised both UTV, STV and Channel Television - none of which are part of the ITV plc conglomerate - and that they should pay far more towards the cost of networked programming.

The two regional broadcasters refuted the claims after appointing an independent examiner to examine the accusation.

"We absolutely refuted this assertion and, along with Scottish Television, commissioned research which demonstrated that ITV plc's claim of subsidy was completely without merit," said UTV chairman John B McGuckian in a statement. "This research has been made available to Ofcom."

McGuckian's comments were made in his statement about UTV's performance during 2008. The group reported a 2% dip in pre-tax profits, down from £20.8m to £20.3m, but a 6% rise in revenue to £120.3m. UTV's television advertising revenue dropped 7% against a 5% fall for the UK TV ad market overall and an 8% drop across the whole of ITV1.

"Given the wider context of the economy and advertising markets, I am pleased with today's results and our prospects for the future," said UTV Media group chief executive John McCann. "These are clearly unprecedented times and the impact on the Irish and UK economies is well documented. The advertising sector is feeling the full force of the downturn and clearly that is an issue we are actively addressing. We moved early to raise capital and reduce debt through the rights issue and have aggressively cut costs throughout the business. Consequently we have once again outperformed the broadcasting sector and I believe we have the ability to maintain that outperformance. We are not complacent about the situation, but as a management team we are confident of the operational and financial strength of UTV Media."