ITN plans pounds 5m charge to clinch ITV deal

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The Independent Online
ITN, the makers of News At Ten, are to take a restructuring charge of pounds 5m next year to meet the costs of a sharply lower contract for the provision of news to the ITV network.

The charge, which will be made against 1997 earnings, will be paid partly by the ITV companies themselves, as a condition of a new five-year contract that has been agreed in draft form between ITV and ITN.

ITN insiders insist that no jobs are in danger in 1997, and that any restructuring costs would be linked, at least initially, to the introduction of new technology. The company currently employs 700 people.

According to documents outlining the draft agreement, the ITV news service will cost pounds 54m in 1997, dropping to pounds 42m in 1998. Thereafter, the contract calls for increases in line with the rate of inflation. The sharing of the restructuring costs, with ITV paying pounds 3m, reflects the fact that several ITV companies are both customers and shareholders of ITN.

The new deal follows months of uncertainty, during which ITN had to see off the threat of a competing news service from BSkyB, Rupert Murdoch's satellite television service, and persistent worries over the company's ownership structure.

BSkyB had offered to provide a news service to ITV for just pounds 30m, compared with this year's price from ITN of pounds 57m.

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