Withdrawal of Networked Output
In July 2009, STV announced that it was withdrawing some networked programmes such as The Bill, Doc Martin, Midsomer Murders, Poirot, Lewis and a number of other high profile ITV network dramas from its schedules, instead preferring to concentrate on programming made within Scotland. The practice of dropping networked shows had been in operation for other programmes since November 2008 when STV announced it would opt-out of programmes they claimed were not performing well in their broadcast region, including Sharpe's Peril, Al Murray's Happy Hour, Moving Wallpaper, Benidorm and The Alan Titchmarsh Show. ITV's coverage of the FA Cup was also dropped.
ITV plc claimed that STV were in breach of their network agreements by making this decision and are subsequently suing STV for £38 million. Latterly, STV counter claimed by launching its own legal action against ITV plc, claiming the company was owed money and unhappy about promotional advertising of their services. The then executive chairman of ITV plc, Michael Grade claimed his company was the "victim" in the ongoing dispute.
Amid many protests, the company's chief executive Rob Woodward admitted in December 2009 that STV had made a 'major mistake' by dropping some of the networked dramas and replacing them in some cases with imported output, repeats and films. The company pledged to continue with its plan to produce more regional programming and opt out of networked output with further plans announced in August 2010.
On 27 April 2011, ITV plc and STV settled its legal dispute, with the former receiving £18 million from STV. The £18 million consists of a £7.2 million cash payment payable in 2011 and £10.8 million either in programme rights at the end of the year or cash, as adjusted, depending on further discussions with ITV plc. The programming rights payment is capped at a maximum of £15 million. In addition, STV will receive £2.4 million of credit for programme opt outs in 2011. STV said it believed it was in the best interests of shareholders to end the long period of uncertainty. The parties have agreed the basis of a more collaborative relationship for the future.
In March 2012, a deal was announced between ITV and the other Channel 3 licence holders which would transform its commercial relationship with them, after the broadcasters negotiated new Channel 3 networking arrangements. The deal would see STV and UTV become “affiliates” of the network, meaning they would pay an up-front fee for the rights to broadcast ITV content. At the time, the licence holders paid a percentage of the Channel 3 network costs based on their share of qualifying revenue. On 23 August 2012 STV confirmed the new network agreement with ITV was in operation.
Read more about this topic: STV (TV Network)
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