Axe looms over 100 ITV sales positions in strategic review

by Fiona Ramsay, Media Week 12-Aug-08, 07:30

LONDON - Up to one fifth of ITV's 500-strong sales team could be made redundant as the embattled broadcaster looks to cut costs by £35m by the end of 2010.

It is understood that ITV Customer Relations managing director Gary Digby has indicated that a review of ITV's operations by consultant Boston Consulting Group is likely to lead to as many as 100 redundancies from ITV's commercial team.

One senior TV sales source said: "The pressure will be on high-profile individuals. Boston Consulting will have looked at the revenue per head in each department, but the issue for ITV sales is they [still] need a support business. Perhaps BCG is taking an over-simplistic approach."

Another senior TV sales executive said that he expected "between 60 and 100" redundancies from the ITV commercial team.

An ITV spokesman said there were "no confirmed or approximate [redundancy] figures" available and there would be "no clarity on the outcomes until September".

On a conference call to discuss its results for the first half of 2008 last week, ITV executive chairman Michael Grade told Media Week that Boston Consulting Group's review was "ongoing" and that the ITV management team was still in discussions with staff about its proposals.

ITV expects to make £11m in cost savings from its broadcast operations in 2009, and £9m from its global content business, which exploits ITV's own content overseas. Of the £41m in savings pencilled in for this year, ITV said £6m would come from staff restructuring.

Last week, the broadcaster confirmed that it expects TV ad revenues for September to be down 20% year on year, with the total TV market expected to be down 17%. ITV estimates that total ad revenue for the eight months to August will be down 1% year on year.

Numis analyst Paul Richards said any redundancies at ITV were "a reflection" of the pressure the business is under. "Desperate times call for desperate measures," he said.

Last month, Media Week reported that ITV's 13-strong planning team would be streamlined, and that its expanding online sales activities would start to work closely with ITV's other sales departments.

Comments

Flekkygirl - 12/08/2008

ITV still have 500 "sales people"? Top ITV executives paid a fortune are now paying Boston Consulting to do their jobs for them, including advising Gary Digby on how many paople he can "let go"? What on earth are the senior team doing? Maybe a combination of 'letting go' some of the 'Senior Team', and requiring the others to think for themselves, thus terminating Boston's contract. would, in itself raise the savings required. This would still leave 500 'sales' people, whose effectiveness must be questioned, especially given the last set of results. If these sales people each had a package that averaged £70K, hey presto, there's another £35m !

Ingrid Pountney - 14/08/2008

a somewhat naive viewpoint given the amount of pressure the City can bring to bare on a listed company to get their house in order and how ever many 'sales' people ITV do or do not have is irrelevant to the latest set of results - they can only sell what they are given to sell, so unless they have a strong enough product in their programming content they'll be swimming against the tide - and no, I don't work at ITV, but I would be proud to and I wish we'd all stop slagging of a great British institution

William Howard - 14/08/2008

If I was a betting man (and I do like the odd fiver on the gee gees) I'd wager that Boston Consulting are doing more than helping ITV slim down to make greater profits. They're preparing it for eventual sale. I agree with the previous correspondent in that we should avoid slagging off a UK institution - but would also wager that within 3 years it's no longer a Great British company.