UK: Hard news, hard times at ITN. (1 of 3)

UK: Hard news, hard times at ITN. (1 of 3) - Tiananmen Square, the Berlin Wall and now the Gulf - news that is not cheap. Daniel Butler reports on the trials of ITN.

Last Updated: 31 Aug 2010

Tiananmen Square, the Berlin Wall and now the Gulf - news that is not cheap. Daniel Butler reports on the trials of ITN.

"It's been a difficult year," admits Sir David Nicholas wearily as he contemplates how best to manage 40 staff in the Gulf. He is chairman and former chief executive of Independent Television News, and the news at ITN has not been good recently. The principal British rival to the BBC has faced an uncertain future, with costs rising just as recession was slashing into advertising. Add to this expensive new headquarters developed as property prices tumbled, government intervention, a threat to its monopoly position and criticism from some customers and you have a difficult brew to drink.

At the heart of ITN's problems lie the uncertainties over the future of British broadcasting. These were exemplified in the Government's Broadcasting Bill which became law last October, but in reality cannot be resolved until the next century. Will existing television and radio stations, or satellite and cable TV, win out in the popularity stakes? Can the independents continue to match the BBC? Will news gathering open up to market forces or continue to receive government protection in the name of the consumer's interest? Only time can tell how news media will have to adapt to the demands which loom ahead, but that is little comfort to an organisation plagued with financial problems and worries.

There is a curious irony about all of this. Information has been one of the biggest business growth areas and, in recession or boom, the thirst for it has grown steadily. This has been particularly clear over the past couple of years. First there was Tiananmen Square, then the collapse of the Berlin Wall and successive Eastern European regimes, climaxing with the Christmas Day firing squad for Romania's Ceausescus. Last spring Nelson Mandela was released and the Soviet Union began to split apart at the seams. In Nicaragua the Sandinistas fell from power, while next door General Noriega was toppled by a US invasion. Finally, to cap it all, in August Iraq invaded Kuwait, precipitating one of the longest runs of lead stories in decades.

And ITN was there throughout. Present as each crisis arose, its footage from around the world was sought eagerly by stations both at home and abroad. In almost any business sector this would be a recipe for a rapid rise in the share price and a cause for celebration - but not so at ITN. There, events abroad caused major problems: costs were soaring. In October last year it was forced to turn to its shareholders and bankers to ask for £18 million to sort out its difficulties. They were distinctly unenthusiastic at the prospect, but in the end had little option - the independents simply have to have something with which to challenge the BBC.

Central to this need are the question marks that the Broadcasting Act has thrown up over the whole of the future of British television, and in particular the woolly "quality threshold" that franchise holders are expected to meet. Although no one seems to know how this will be defined in practice, all observers agree that a news service will clearly pay a crucial part.

Here ITN has an inbuilt advantage. The service enjoys a monopoly position, supplying news to the independent television channels that own it and that pay accordingly (the initial estimate for 1990-91 was £60 million). While this has just been confirmed for the next 10 years, until recently there was some doubt as to whether it would be renewed.

When, thanks in large part to world events, ITN's chiefs were forced to turn to their backers for more cash, there was heavy resistance. The advertising industry was in deep recession. As British companies began to feel the pinch, it was advertising campaigns which felt the finance director's scalpel first (the Saatchi-owned, media-buying organisation Zenith, which bulk-buys TV slots, predicts a real-term fall of 3.5% in revenues over the next year). As a result, to keep to their schedules, the television companies had to cut rates, resulting in falling revenues. The last thing that they wanted was unexpected demands for cash from ITN.

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