ITV's £4m fine 'a bit of a result'

ITV's anticipated record £4m fine is a "bit of a result" for the broadcaster - and executive chairman Michael Grade handled the controversy well, media and industry analysts say.
The fine - for a string of viewer deceptions surrounding phone-ins on programmes including Ant and Dec's Saturday Night Takeaway - was well below the £70m maximum from regulator Ofcom and lower than many had anticipated.
Grade's swift move to appoint Deloitte to conduct an internal review of programming and promising to spend £18m on compensation and other remedies has been seen as key to the relatively small punishment.
"Compare the size of GMTV and ITV and outwardly financially it is probably a bit of a result," said Jim Marshall, the chairman of Starcom UK. "But the ruling has to take into account the way it was handled.
"Michael Grade handled it well in accepting responsibility, getting ITV's house in order and there was a feeling that most of the problem was under the previous regime. I expect that Ofcom want to draw a line under this and move on."
Other analysts said the fine was small in the context of ITV's revenues - about £265m in pre-tax profits in 2007.
"You are talking about a company that makes hundreds of millions in pre-tax profits so £4m is neither here nor there," says Alex DeGroote, a media analyst at Panmure.
Despite the fine being far below the maximum available to Ofcom, in the wider context of breaches of the broadcast code the fine is still likely to be double the previous record levied against GMTV.
"It does feel like it could have been much worse but it is still a significant amount of money," said Richard Oliver, managing partner at media agency Universal McCann.
"If ITV's TV revenue dropped by £4m in a month that would be a big deal and such a sum can't be dismissed easily.
"It seems like a reasonable result all round, sending a suitably strong message - but it isn't crippling either."
Beyond the value of the fine, the industry will examine how damning Ofcom's ruling is against the broadcaster and its operations. Previous rulings have included forcing broadcasters to make several on-air apologies.
"It would send out the wrong signals to hammer them [with a huge fine]. Ofcom has to take everything in the round," says DeGroote.
"A punitive fine would not have served a good purpose in light of ITV's low share price, poor morale in general and an unhealthy advertising outlook. Ofcom has to take a broader view and been sensible in its decisions."