ITV Set to Cut £20m After Hollywood Strikes Impact Revenues
British media conglomerate ITV has recently announced plans to reduce costs by an additional £20 million in response to a decline in revenue, primarily attributed to strikes in Hollywood that have affected the company’s financial performance. The stock value of ITV experienced a slight downturn on Thursday morning following a drop in sales, particularly within its production arm, ITV Studios.
In a report to its stakeholders, ITV revealed an 8% decrease in group revenues to £2.74 billion for the nine-month period ending in September, compared to the previous year. This decline is largely linked to the performance of ITV Studios, responsible for producing successful shows like Rivals for Disney+ and Ludwig for the BBC. ITV Studios witnessed a significant 20% reduction in revenue to £1.21 billion during the same timeframe due to disruptions caused by strikes impacting multiple projects.
As a result of these challenges, ITV anticipates a shift of approximately £80 million in revenue to the next financial year due to the industrial actions. Additionally, the declining demand from European free-to-air broadcasters in recent months has further impacted the Studio’s financial results. To address these difficulties, ITV has outlined plans to tighten its budget further this year, with an extra £20 million in cuts, including a substantial £10 million reduction in content expenses, on top of the previously announced £40 million in cost savings.
Carolyn McCall, the chief executive of ITV, expressed confidence in the company’s strategic progress despite the financial setbacks, stating, “ITV’s good strategic progress has continued in the first nine months of 2024 driven by strong execution and industry-leading creativity.” She also highlighted that ITV Studios is performing well despite the challenges posed by the writers’ strike and a softer market from free-to-air broadcasters.
In response to the news, ITV’s shares dropped by 7.4% on Thursday morning as investors reacted to the financial update. The company remains focused on navigating these challenges and ensuring that it remains a key player in the competitive media landscape.
The impact of the Hollywood strikes on ITV serves as a reminder of the interconnected nature of the global entertainment industry and how external factors can influence the financial performance of media companies. With a strategic focus on cost management and operational efficiency, ITV aims to mitigate the effects of these challenges and continue delivering high-quality content to its audiences.