UK network ITV is planning an additional £20M ($25.9M) in net cost savings, as impacts of the 2023 Hollywood labor strikes hit its production arm and broadcaster demand drops.
The broadcaster has posted group revenues of £2.74B, down 8%, for the nine months to September 30, 2024, with media and entertainment turnover, which includes linear channels, up 4% at £1.52B. Digital revenue also grew as streamer ITVX grew streaming hours by 14%.
However, today’s trading update revealed revenues at ITV Studios, the production arm that makes the likes of Love Island and I’m a Celebrity… Get Me Out of Here!, had fallen 20% to £1.21B, which was “impacted by the expected phasing of production deliveries, which are heavily weighted to Q4, and the impact from both the 2023 U.S. writers and actors strikes.” The industrial action will see around £80M in revenue transfer from 2024 to 2025, ITV said in its guidance.
Lower demand from free-to-air broadcasters in Europe also hit the figure, but ITV Studios still delivered seasons of My Mum Your Dad, Queer Eye, Love Island and Showtrial during the accounting period.
However, ITV Studios is still on to deliver “record EBITA” for the full year with a “significant” number of shows delivering in Q4. Revenue decline for 2024 is expected to “mid single digits… only marginally down year-on-year, excluding the impacts of the U.S. actors and writers strikes.”
ITV revealed its ongoing cost saving program was “progressing well,” with the previously planned £40M savings for 2024 set to be reached. However, the broadcast has announced another £10M in content cost savings and £10M from “early delivery of permanent non-content savings” originally planned for next year.
Net debt currently sits at £437M, and last year the broadcaster entered into a new £200M bilateral loan facility that matures in December 2030.
ITV CEO Carolyn McCall said the network was making “good strategic progress” and predicted an uptick for ITV Studios in Q4.
“ITV Studios is performing well despite the expected impact of both the writer’s strike and a softer market from free-to-air broadcasters,” she said. “ITV Studios has had an excellent start to Q4, in line with expectations, which will ensure it achieves record profits in 2024. Studios has great creative and commercial momentum as demonstrated in the last few weeks with shows including Rivals for Disney+ and Ludwig for the BBC and is on track to deliver good revenue growth in 2025 and 2026.
She noted that the cost saving programme was also “progressing well” through “restructuring, improved efficiency and simplifying ways of working.
“Coupled with our strategic delivery and revenue outlook, this continues to give us the confidence that we will deliver an increase in group profit this year.”