CRR changes will not affect TV until 2010

by Emma Barnett, Media Week 11-Sep-07, 11:25

LONDON - The Office of Fair Trading has assured broadcasters that any changes to ITV's contract rights renewal mechanism will not affect TV trading until 2010.

This appeared to scotch ITV’s hopes for a swift resolution to the review, as expressed in a statement released last week in response to the OFT’s decision, which said: “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.”

Channel 4 and Five spokesmen confirmed that, according to the OFT, the changes would not take effect until the start of 2010.

An email seen by Media Week sent to Channel 4 by the OFT stated: “If changes are needed to CRR, then the review is likely to involve a two-stage process involving the Competition Commission… in those circumstances, our expectation is that the whole review (including the Competition Commission) is likely to be completed in 2009, not before the end of 2008.”
Gary Digby, managing director of ITV Customer Relations, said: “We don’t feel any extra pressure. We are always committed to delivering the highest share of commercial impacts as possible whether there is a CRR review or not. It will be business as usual.”
Several TV buyers warned that, should CRR remain unchanged for two years, agencies could be tempted to pull money out of ITV. This would put pressure on ITV to deliver the highest possible commercial share of audience figures in order to prevent the mass withdrawal of funds permissible under CRR.
Chris Hayward, head of investment at ZenithOptimedia, said: “This latest investigation should be done properly with the aim of introducing a series of measures governing the conduct of trading that embraces all channels, including digital sales houses. A system that relates programme performance with advertising is good in principle, but applying it just to ITV1 makes it unbalanced.”
Jim Marshall, chairman of Starcom and the IPA Media Futures Group, commented: "ITV still commands the lion’s share of advertising. Freed from CRR obligations, ITV may act in an anti-competitive manner in trading with agencies."
He added: "There is no great appetite among agencies for any relaxation of CRR."