STV bosses today insisted they were protecting regional news despite making £3 million of cuts, including closure of the company’s studios in the north of Scotland.
The controversial proposals will see 60 jobs – 10% of its payroll – axed in a shake-up of its operations. This includes the surrender of the former Grampian licence for the northern region which will require permission from the regulator, Ofcom.
Rufus Radcliffe, the chief executive, said the company was operating in a “very difficult macro-economic environment” in which profits had fallen and advertisers were not spending.
“We were hoping for an advertising bounce next year but there are no signs of that happening,” he told Holyrood’s Culture committee.
Viewers of STV News at 6pm were also falling sharply as they turned to other sources of information, mainly online.
“No one is tuning in at 6pm to see what has happened,” he admitted, explaining that viewers were now getting access to online news before scheduled broadcasts. He added that “the speed of change in viewing behaviour is getting faster.”
He outlined the case for a shift to other platforms, while a new 6pm programme will be launched that will take these changes into account and how news is delivered via opt-outs from Glasgow to serve the north.
Bobby Hain, managing director of audience, news, regulation and audio, said Scotland was well served compared with Wales and Northern Ireland which have half the opt-outs of Scotland, and the regions of England where it is about a quarter.
Tory member of the commitee Stephen Kerr, said he had been born around the time Grampian TV was launched and accused the company of “ripping up” the licence.
“This decision ends north east broadcasting,” he said. “They are effectively giving up on STV North.”
The committee heard that 1.3 million people live in the catchment area and members asked how STV intends to continue delivering a quality news service without a locally-based studio.
Mr Radcliffe and Mr Hain denied the licence was being “ripped up” and defended their announcement despite signing the renewal in January of this year. Alasdair Allan said it was “stretching credibility” that they did not know about their plans at the time.
Mr Hain said the licence agreement was based on years of negotiation and that in the meantime circumstances had changed. Also, it did not require broadcasting from the area to which it was delivered and he gave examples of news this being case elsewhere.
They said they were confident that a new radio station, being launched early next year would help the company grow.
Mr Radcliffe said launching the radio station was a result of a “thorough strategic analysis”. Unlike other commercial radio stations its content would be produced in Scotland and there had been “positive feedback” from potential listeners and advertisers. Half a million pounds has been committed to it so far and he expects it to be profitable by 2027.
Earlier in the session, Paul McManus, negotiations officer Scotland, of trade union BECTU, said the company appeared to be on a “stable path” with a steady flow of profit and he found it “difficult to believe STV has been caught unawares”.
He questioned why £1 million had been spent on bonuses for two staff, one of whom had now left, and why it was “taking a punt” by investing in a new radio station in which it had no experience.
“These are not rational decisions that make sense,” he said, adding: “I think it [radio] is a complete folly at this point in time.”
He added that the advertising staff in the north east were exceeding their targets. “They have done what has been asked of them, and now they [STV] want to get shot of them,” he said.
Nick McGowan-Lowe, national organiser for Scotland at the National Union of Journalists, described the decision as “an act of cultural vandalism” and accused STV of “financial mismanagement”.
He said Ofcom will hold a four-week consultation which was a “ridiculously short” time to take in all views around the implications of the decision.
He said the change would not be good for businesses, or for people in the north east or from the central belt, where bulletins would be cut into to provide the opt-outs for the northern region.
“I would like to know what options were considered before these decisions were made,” he said. “Where is the plan?”
He said a piece of equipment costing £30,000 was “still arriving” as the company announced the cutbacks.
The north east studios would be “mothballed” as part of a disaster recovery plan, a move described by Mr McManus as “insulting” to the staff.
With the share price having plummeted, both said STV was now vulnerable to takeover and said there was a need for a wider debate about regional broadcasting.
Noting the decline in the company’s share price, Mr McGowan-Lowe said the current leadership does not have the confidence of shareholders or staff, a view later echoed by MSPs.
Mr Radcliffe told the committee: “The shareholders understand the environment we are operating in and they understand the cost saving plan.”
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