ITV boosted as OFT decides on CRR review

by Daniel Farey-Jones, Brand Republic 06-Sep-07, 10:10

LONDON - The Office of Fair Trading has decided to review ITV's contract rights renewal mechanism in partnership with Ofcom, starting in January.

In response to the announcement, ITV said in a statement it would push to have the process concluded within a year.

"ITV welcomes the OFT's decision to review the Contract Rights Renewal remedy put in place in 2003 prior to the Granada-Carlton merger.

"We will be making the strongest possible representations to the OFT to conclude the processes within a year from now, giving advertisers and commercial broadcasters the certainty needed to contract airtime and plan levels of programme investment for the calendar year 2009."

The decision raises the prospect of a change in the balance of power between media agencies and ITV's sales division in time for the late 2008 season of airtime negotiations.

CRR has ensured the broadcaster's advertising revenues from its main channel ITV1 have fallen as its share of viewing has fallen.

The review will satisfy ITV's executive chairman Michael Grade, who has argued that CRR is "a straitjacket" that penalises the main channel for taking risks on new programmes that may not initially get big ratings and forces it to stick to "banker" shows such as 'Heartbeat'.

CRR was put in place, at ITV's suggestion, when a single ITV was created by the merger of Carlton and Granada in 2003. It was designed to compensate for the concentration of market power at a time when ITV accounted for more than 50% of total commercial airtime sales.