As a vital part of creative Britain, the potential damage being done to ITV by the Covid-19 lockdown should be deeply worrying.
ITV’s chief executive Carolyn McCall has done the right things to limit the scarring. Some 800 workers have been furloughed, the dividend and executive pay have been cut, and costs pruned.
Studios are closed, filming of Corrie has been temporarily halted, its biggest money spinner Love Island has been cancelled this year and advertising is down a chunky 42 per cent.
ITV boss Carolyn McCall has furloughed some 800 workers, cut the dividend and executive pay and pruned costs severely
Yet it is still putting out big hits such as Quiz, which brought in an audience of 10m, and its streaming options Hub and Britbox are doing a roaring trade.
The broadcaster is in a hugely competitive place. And while it is stymied by the UK lockdown, others are making hay.
Disney has problems too. It has forgone £1.1billion of profit because of the closure of theme parks in the US, Asia and France, and cut the dividend and executive rewards.
Yet despite the difficulties at its sports channel ESPN (because there is no sport to speak of), Disney’s new streaming service has acquired 50m subscribers around the world.
The pandemic means it is well on its way to the five-year target of 90m. As for Netflix, it is having a riot.
Last month it reported that its new net subscribers had doubled to 180m worldwide and that some locked-down households, normally very sniffy about pay TV, are singing the praises of series such as Unorthodox and Fauda.
Coronavirus may have slowed things down but with a £15.2billion production budget, Netflix has been able to switch shooting from Hollywood to Iceland, South Korea and Japan, where Covid-19 has not brought the nation to a shuddering halt.
We shouldn’t underestimate the creative genius of ITV studios, a provider of shows to Netflix, and how advertising will eventually bounce back.
But while it is forced to sit on its hands, the wealthy US streaming services are grabbing new audiences. That cannot be helpful over the longer haul.
Teutonic plates
You know things are really bad when the usually fiscally-constipated German government taps into the London syndicated loan market to raise funds. It has just borrowed £4billion through a 15-year bond.
As with every other advanced country, Germany is racking up large bills for its version of furloughs and the bailout of small firms by the KfW – the publicly-owned bank for small and medium sized enterprises.
Berlin is happy about self-help. But Germany doesn’t much like the European Central Bank (ECB) in Frankfurt, built in the image of the Bundesbank, being used to prop up the eurozone by substituting monetary policy for budgetary policy.
Irritation about this, arising from Germany’s Weimar hyper-inflation syndrome, has been simmering for a long time.
The legal embers have been fanned by the decision of ECB President Christine Lagarde to launch the £658billion pre-pandemic asset purchase scheme.
This provoked the German constitutional court in Karlsruhe to dispute a European Court of Justice ruling, dating back to the euro crisis, that quantitative easing fulfils legal requirements. The German court’s effort to overturn a decision of Europe’s judicial body is seen as a hostile act.
Brexit supporters might like to think that this clash of the legal titans is the final nail in the coffin of the single currency.
But the reality, as with similar challenges, is that it will likely end up as a glorious European fudge.
Rose must act
What should have been a moment for wallowing in the success of tech grocery pioneer Ocado is overshadowed by reputational damage.
Its website boasts: ‘The board has long been mindful of the importance of good corporate governance and the role it plays in supporting the long-term success and sustainability of the business.’
But with its winner-takes-all reward scheme, which gave boss Tim Steiner £58.7million in total pay and incentives, it makes a nonsense of that commitment.
The vote of 29.74 per cent against the remuneration report is an indictment of the work of the pay committee and its head Andrew Harrison.
Chairman Stuart Rose should have seen this governance car crash coming and headed it off.
The board now must unpick the gusher ‘growth incentive plan’ immediately and should discard those who designed and approved it before more harm is done.
It is a big diversion from what should be an uplifting narrative.
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