'Business as usual' for ITV

ITV Digital has said it would be a case of ‘‘business as usual’’ for the channel after today’s announcement.

ITV Digital has said it would be a case of ‘‘business as usual’’ for the channel after today’s announcement.

A spokeswoman said the move into administration would ‘‘protect’’ the channel while urgent restructuring work was carried out.

‘‘The board of ITV Digital has a duty to declare if the business is viable and as of today ITV Digital’s financial position is untenable,’’ she said.

‘‘Administration means the shareholders are continuing to fund the business while the restructuring work is completed, they have extended the lifeline.’’

ITV Digital has already axed 600 staff as part of its cost-cutting drive, leaving it with 1,800 employees.

The spokeswoman would not comment on the level of additional funding pumped in today by Carlton and Granada.

Both groups have invested £800,000 (€1.3m) into ITV Digital but have been hit hard by the advertising slowdown.

The loss-making channel currently has around 1.26 million customers but is losing one customer for every four it recruits.

The Independent Television Commission awarded the digital spectrum to the Granada-Carlton consortium in 1997.

Mr Justice Etherton began hearing the administration application in private after being told by Gabriel Moss QC, for ITV Digital, that it involved matters of ‘‘extreme commercial sensitivity’’.

Mr Moss said the aims of justice would be defeated if the case were held in open court, although the result of the hearing would be made public.

Rebecca Allen, media analyst at JP Morgan, said Granada and Carlton would need to pay at least £30m (€48.9m) to keep ITV Digital alive for a three-month period.

She added the planned move into administration would increase the bargaining power in negotiations with suppliers, especially the Football League.

‘‘This is a threat to the Football League, they are saying: ‘We are very, very serious indeed that we will close this unless you renegotiate the contract’.’’

She added, however, Granada and Carlton’s shares may suffer as investors baulk at the prospect of more cash being spent on the channel.

‘‘Administration is not the same thing as closure,’’ she said. ‘‘There is short term funding preserving it as a going concern.’’

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