Losses at UTV Ireland spiralled to almost €20m last year

UTV IRELAND RACKED up losses of almost €20 million last year as the station’s operating expenses soared.

According to new accounts for the television station, which was launched with much fanfare at the start of 2015, the company made a loss of €19.5 million in the 12 months to the end of December 2015 – its first full year of operations.

This compares to a loss of €3.9 million the year before. As the station was not on the air at the time, this likely refers to startup costs associated with getting the broadcaster up and running.

The company reported turnover of €16 million during the year, however its operating costs were more than double that figure – at over €35 million.

The Dublin-based station made an operating loss of €19.1 million and also spent about €339,000 on interest payments, as well as losing €65,000 on an ‘exchange loss’.

The company’s directors report said that during the year “consumer confusion around re-tuning of digital receivers and programming inconsistencies to the long-established UTV Northern Ireland was gradually addressed”.

It said: “UTV Ireland quickly established itself as the second most watched channel in Ireland in weekday peak time.

“However, this performance was not matched at the weekend where the absence of consistently popular programming undermined overall audience delivery and therefore advertising revenue projections, leading to revisions of profit expectations.”

Profit warnings

The losses are far above what had been first projected by the station’s management. When plans for UTV Ireland were first announced in November 2013, UTV said that the station was expected to break even by the end of its first year on air.

The station went live at the start of 2015 after capturing the rights for soaps like Coronation Street and Emmerdale from TV3. These shows deliver the station big daytime audiences, however the station’s original programming was much less successful in drawing in viewers.

A UTV Ireland camera

The station issued multiple profit warnings after it went on air as it struggled to compete in a market dominated by RTÉ and, to a lesser extent, TV3.

The station found it difficult to gain traction with both viewers and advertisers and revenue fell below expectations due to a slower than predicted build in audience numbers.

Sale

Northern Ireland-based UTV Media, which set up the station, warned last year that losses at UTV Ireland would likely top €18 million in 2015.

UTV Media sold its television portfolio, including UTV Ireland, to UK-based ITV as part of a £100 million deal that was closed in February.

ITV then announced that it would sell UTV Ireland separately for €10 million to Virgin Media Ireland.

Virgin Media Ireland is a subsidiary of Liberty Global, a giant telecommunications firm controlled by US billionaire John Malone. Liberty Global also owns TV3 and its sister station 3e.

UTV Ireland employed 107 people during 2015, 36 of whom were classified as working in ‘programming’.