'Slaughter’ in advertising drives ITV into the red

A dramatic slump in advertising revenues plunged ITV into the red today as the search for a chief executive to succeed Michael Grade continued.

Advertising revenues at the troubled broadcaster were down 15% in the first six months of the year, robbing the firm of £108 million of income.

ITV racked up losses of £105 million in the first half of the year, against a deficit of £1.5 billion in the same period of 2008.

ITV also revealed its pension deficit has ballooned from £178 million at the end of 2008 to £538 million today.

Grade, who has agreed to relinquish his role as executive chairman and become non-executive chairman once a chief executive is found, said the losses "reflect the impact of the unprecedented downturn in television advertising". He said the industry was in "the worst recession we have ever seen".

Martin McNulty, director of online marketing agency Trafficbroker, said the 15% slump in revenues "is more than serious, it's a slaughter".

However, the slump in advertising at ITV was not as bad as in the overall market, where revenues were down 17% or £277 million in the first half.

Grade signalled the worst of the advertising recession may have passed and forecast revenues to be down 12% in the third quarter.

Shares in ITV, which were trading at 120p two years ago but sank as low as 17½p early this year, were up 1.6p to 43.6p today.

"Whilst UK television advertising remains down, the rate of decline has eased and ITV continues to outperform the market," said Grade.

He also highlighted the success of shows such as Britain's Got Talent, which with a peak audience of nearly 20 million viewers was the highest rating non-sports programme on UK television for six years.

Grade added that ITV is now delivering good dramas such as Whitechapel, while ITV2 has overtaken 5 in terms of 16 to 34-year-old viewing figures.

ITV offloaded Friends Reunited for just £25 million having bought it for £170 million four years ago.

The broadcaster said it is on course to appoint a new chief executive by the end of the year. A decision is thought to be closer than that, with HMV's top dog Simon Fox and Pascal Cagni, the Frenchman behind Apple's European operations, among the favourites.