ITV said today the days of excessive star salary hikes were numbered as the economic downturn signalled more tough times ahead for television advertising.
The group - home to star-led shows such as X-Factor and I'm a Celebrity... Get Me Out Of Here! - said it "can't afford to overpay" for talent as it predicted a 9 per cent fall in advertising in the run-up to Christmas.
The group said the wider market was set to see an even bigger drop - at around 9.4 per cent in the final three months of the year - and hoped ITV would maintain its share of the UK television market in 2008 for the first time in more than 25 years.
John Cresswell, ITV chief operating officer, said: "The heat has gone out of the talent market and we will no longer have the salary inflation we have seen.
"Two years ago, the rate was going up and up but that was in different economic times. We will pay what we need to pay, but we can't afford to overpay."
The group reportedly asked its stars to take a pay cut last month amid a sweeping cost cutting regime that has seen around 1,000 jobs axed.
X-Factor's Simon Cowell is thought to have agreed a £20 million three-year contract in December 2006, while Ant and Dec are said to have secured £15 million each in a "golden handcuffs" deal.
ITV reported total broadcasting revenues down 5 per cent in the first nine months of the year, to £1.2 billion, while group-wide sales dipped 1 per cent.
Michael Grade, executive chairman of ITV, said the economic downturn meant trading conditions would remain tough throughout 2009.
Online revenues for the full year and in 2009 would also be affected by the advertising slowdown, the company added.
The group's websites include Friends Reunited and ITV.com.
However Mr Grade said ITV was holding its own: "We are feeling the impact of the wider economic conditions and a weakening advertising market, but the family of channels has continued to show its strength and outperformed its competitors."
The ITV family - ITV1 and the group's digital channels - saw a 2.5 per cent drop in net advertising revenues (NAR) at £1.04 billion for the first nine months of the year, against a 3.2 per cent fall in the total TV market.
Of its autumn line-up, X Factor and Coronation Street attracted audiences of more than 10 million viewers in recent weeks.
The group's key channels delivered 5 per cent more "impacts" - a measure of how many people are viewing adverts.
But its share of commercial impacts, which is widely scrutinised by advertisers, dipped to 40.9 per cent from 41.3 per cent a year ago, while the decline for ITV1 gathered pace since the interim stage, now down 5.7 per cent.
ITV said it remained focused on its turnaround plan, which led to the recent job cuts.
More than 400 roles are being axed in its regional services after Ofcom recently suggested that its regulatory requirements for public service broadcasting, such as regional news broadcasts, should be cut.
This could help save ITV £40 million a year from 2009 on top of £35 million in wider cost reductions by the end of 2010, according to ITV.
Shares in the group sunk 4 per cent today, with analysts raising concerns over signs that the advertising slowdown was gathering pace.
Numis Securities analysts said in a note: "Operationally, ITV continues to make significant progress, as evidenced by its audience and relative advertising performance. However, the gloomy advertising outlook continues to weigh on the group's financial performance."
ITV saw a 28 per cent drop in underlying profits in the first six months of the year and disappointed investors with a 50 per cent cut in its half-year dividend.
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