STV clashes with ITV over costs

By Jamie McIvor
BBC Scotland

Member of the public being interviewed by a film crew

SMG hopes a focus on television and internet will turn round its fortunes

STV has become embroiled in a dispute with the company that runs ITV in England and Wales over how much it pays for programmes.

ITV chairman Michael Grade claimed earlier this month that his company was subsidising STV and Ulster Television to the tune of �25m-a-year.

But STV's owner SMG claimed this morning that the opposite was true, and the remaining independent stations like STV were in effect subsidising the main ITV company.

SMG's chief executive Rob Woodward has written to the regulator Ofcom to challenge ITV's claims.

Mr Woodward said good progress was being made turning round SMG's fortunes.

Earlier this year the company sold Virgin Radio and it now plans to focus its efforts purely on television and the internet.

However STV's fortunes are still heavily dependent on those of ITV as a whole - the vast majority of its programmes come from the ITV network and national advertising sales are falling.

However, the company is confident it can attract more money from firms which only want to advertise within Scotland.

SMG also revealed it made a pre-tax profit of �4.2m in the first half of the year, which is more than many in London had been predicting.

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