ITN to sign cut-price contract with ITV

ITN, which makes news programmes for ITV, Channel 4 and Channel 5, will finally reach agreement this week on the controversial renewal of its key contract to supply ITV. The contract, to run for five years, will be pitched at just under pounds 42m in the first year, down from pounds 57m a year currently, and will be linked to the rate of inflation.

The contract, which had been expected to be signed last month, was held up by a number of disagreements, most recently over the use of regional news pictures produced by ITV companies. ITN, best known for its News at Ten programme, was eager for the right to use newsworthy material even before it ran on regional networks.

According to sources at ITV and ITN, agreement was within reach late last week. The contract puts an end to several years of uncertainty for ITN, which had been dogged by ownership questions and a putative bid by Rupert Murdoch's BSkyB to wrest the ITV contract away.

Under the terms of the Broadcasting Act, no single company can own more than 20 per cent of a "nominated news supplier," of which ITN is the only one. Following the takeovers of Central Television and LWT by Carlton and Granada respectively, the two ITV giants ended up with 36 per cent each of ITN.

Carlton and Granada agreed to sell their excess stakes to Lord Hollick's United News & Media and Daily Mail & General Trust, in a deal that valued ITN at about pounds 99m. The price of the agreement was a lower per-year price for the main ITV news supply contract.