Falling advertising revenues at ITV, as hopes emerge that their production division may avoid impacts from Trump's tariffs.
ITV Braces for a Dip in Advertising Revenue
In an unexpected turn of events, ITV is preparing for a 14% drop in its second quarter earnings. This follows a modest 2% decline in the first three months of the fiscal year, which was favored by the Euro 2024 football tournament. Despite these setbacks, the company remains unfazed about the proposed US film tariffs affecting its production arm, ITV Studios.
Some behind-the-scenes maneuvering is underway as ITV assesses the possibility of trade tariffs in the US. However, they are optimistic that their ITV Studios division, known for producing popular series like Mr Bates vs The Post Office, Fool Me Once starring Michelle Keegan for Netflix, and the Disney+ adaptation of Jilly Cooper's novel Rivals - will evade the impact of any potential 100% levy on international films.
"ITV Studios only produces TV programming and does not expect any direct impact from the imposition of tariffs on films," the company stated confidently.
Such tariffs, theorized by Donald Trump, would target films created outside the US, which appears to exempt ITV's TV programming from direct consequences.
In Q1, ITV Studios marked a 1% increase in revenues, rebounding after the influences of the 2023 US actors and writers' strikes. Meanwhile, total group revenue dropped by 1%, adding pressure on the company's CEO, Carolyn McCall, as she strives to regenerate ITV.
McCall cautioned that the 'macroeconomic environment is uncertain,' sending the shares sliding 1.3%, or 1p, to 78p. Over the past decade, ITV shares have plummeted approximately 70%.
Certain acquisitions and partnerships have been proposed to help boost ITV's standing. The company has reportedly held talks about merging the Studios arm with All3Media to create a media powerhouse valued at over £3 billion. All3Media, owned by Abu Dhabi-backed Redbird IMI, has produced shows such as The Traitors.
Meanwhile, Banijay, the French group behind Big Brother, is exploring the possibility of acquiring ITV Studios or taking over the entire ITV organization.
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In the midst of ITV's financial challenges, some might see an opportunity for investment in its stocks, given the potential growth from proposed acquisitions or partnerships, such as the merger with All3Media or acquisition by Banijay. Furthermore, the ITV Studios division, with its robust portfolio of popular series, could be an intriguing prospect in the expanding market of technology and digital media.
