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ITV has been fined a record £5.675m for 'grave' breaches of the UK's broadcasting code in connection with premium rate phone in competitions on TV shows, including Ant and Dec's Saturday Night Takeaway. Regulator Ofcom said that the scale of the punishment 'reflects not only the seriousness of ITV's failures, but also their repeated nature'.
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Ofcom indicated that the fine would have been even higher had the broadcaster not already agreed to pay £7.8m in refunds to viewers who paid to enter competitions unaware that the winners had already been chosen. ITV accepted the scale of the fine, and executive chairman Michael Grade offered an 'unreserved apology'.
ITV's shares fell by a little under 1 per cent to 67p in Thursday's afternoon trading, a fraction over our sell tip last month (Sell, 63p, 10 April 2008). Despite the record size of this fine, the tough advertising market is more of an impediment to future profits, and we reiterate our sell advice.
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