UTV Ireland won't turn a profit until 2018 as Liberty eyes TV3 TV
Published 14/06/2015 | 02:30
Ireland's television industry is set for seismic changes over the next couple of years between the arrival of John Malone's Liberty Global which is bidding for €120m valued TV3 and new estimates that show that losses at UTV Ireland will be worse than previously forecast.
The weakness at UTV has prompted some speculation that Liberty may consider moving to buy some or all of the media firm after taking over TV3 in coming weeks. UTV Ireland won't make a profit until 2018, according to Davy Stockbrokers. Analyst Robert Stokes said Davy is cutting its 2015 and 2016 forecasts for the station's parent company UTV Media as a result.
"UTV is now forecasting an £8.5m loss for UTV Ireland in 2015. We think it unlikely that UTV Ireland will be profitable before 2018 and have downgraded our 2015 and 2016 numbers to reflect this,"
"We now have UTV Ireland losing £8.5m in 2015, £4m in 2016 and approaching break-even in 2017. Cumulatively, we are therefore forecasting a loss of €16m over the first four years of operation.
"Firstly, it took substantially longer than anticipated to get public-service designation for the channel. This gave UTV very little time before the launch date to engage with its prospective audience about electronic programme guide positions (channel number) and, where necessary, re-tuning of digital TV boxes.
"Secondly, at the time of full-year results, management referred to what they call the 'Ant and Dec problem'. UTV Ireland has the rights to the new episodes of Ant and Dec, but TV3 still has the rights to older, pre-2015 episodes, and it is repeating them in a time slot starting just a few minutes ahead of UTV Ireland's broadcast of the new content. This has confused viewers and impacted audience numbers. The same problem is occurring with a number of other ITV shows, including the Jeremy Kyle Show and The Cube where TV3 can still, for the moment, repeat the old shows and take market share.
"A combination of these factors meant that initial audience numbers disappointed and as a result advertisers have yet to be convinced about the channel's reach. There is a clear strategic logic for UTV Ireland in providing television operations throughout Ireland but, while it is too early to come to any far-reaching conclusions, the teething problems have been worse than anticipated."
However, Stokes said UTV Ireland "is likely to experience an improving environment going forward as it adjusts its schedule, improves its content and leaves behind its set-up problems."
Last week, only 7,000 people tuned into UTV's Ireland Live news programme in its new 5:30pm slot.
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