STV, ITV end legal row with £18m deal

STV and ITV have ended their various legal disputes by agreeing a £18 million settlement, the two companies announced this morning.

The settlement involves STV paying £7.2m in cash to ITV this year and a further £10.8m in cash or programme rights, depending on "further discussions" between the two broadcasters.

The cash sum will be made in agreed instalments from STV's existing bank facilities, while a programme rights transaction would be capped at a maximum of £15m. Also in the settlement, STV will receive a £2.4m credit for programme opt outs in 2011, giving it a cash impact of £4.8m.

The Scottish broadcaster expects to book an exceptional charge of around £9m as a result of the deal in its financial results for the first half of this year. However, the £18m settlement is less than the £21m STV estimated in February of this year.

ITV and STV have also "agreed the basis of a much more collaborative relationship for the future which will avoid a reoccurrence of the issues which resulted in legal action".

The disputes began back in September 2009 after ITV sued Channel 3 licence holder STV to recover estimated net debt of between £15m and £20m of what it claimed were unpaid network budget contributions from STV.

STV immediately countersued ITV for £35m over alleged unpaid advertising income and other operational issues. The broadcaster also later lodged a further £12 million damages claim over unfair exploitation of video on-demand rights.

In a statement, STV said that today's settlement is in the shareholders' best interests as it brings to an end "a long period of uncertainty over the relationship with ITV and ITV Network", and allows STV to focus on its core activity.

STV chief executive Rob Woodward said: "I am pleased that we have reached a wide ranging settlement with ITV and that our two organisations can work collaboratively in future for the benefit of the Channel 3 Network.

"STV is committed to the Channel 3 Network and we will also continue to pursue our strategy of building on our leading position as Scotland's digital media company."

Adam Crozier, the ITV chief executive, added: "We are very pleased that this long-running legal dispute with STV has been settled by way of an £18m payment to ITV. We look forward to working closely with STV in the future."