STV has reached an £18m out-of-court settlement with ITV, after being locked in a legal wrangle with the national broadcaster since late 2009. The deal removes a key risk from the shares, which remain lowly rated.
Under the agreement, STV has agreed to pay ITV £7.2m in cash this year and a further £10.8m in either programme rights or cash in December. STV will also receive £2.4m of credit for programmes it opts not to take from ITV, which means that the net cash impact on the Scottish broadcaster could be just £4.8m. STV expects to book a one-off charge of about £9m in its first-half results for 2011, on top of provisions already made.
ITV initially filed a £38m action against STV for unpaid programme contributions, claiming it was owed between £15m and £20m after STV opted out of broadcasting ITV programmes in favour of locally-made content. STV launched a £35m counter-claim and the case was due to be heard later this month.
When: 1/04/11
Price: 156p
Performance to date: +8%
