WPP’s GroupM, in effect the controller of its various media agencies, is threatening to pull around £200m of ads from UK broadcaster Channel 4 (27 per cent of the total) if the publicly-owned broadcaster won’t agree to revised (lower presumably) terms when their current deal expires at the end of the month.
Channel 4’s ratings, particularly among the young 16-34 age group, have fallen over the past year or so as it has lost big ratings winner Big Brother to Richard Desmond’s Channel 5.
ITV has also put in a strong ratings performance despite the Olympics being on BBC while digital channels also chip away at terrestrial audiences and revenue.
Now if C4 lost 27 per cent of its revenue it really would be panic stations – not just for the broadcaster but also, in PR terms, for WPP. WPP shareholders have just voted to return the company’s domicile to the UK (although we haven’t seen the small print yet) following changes in Treasury rules that WPP claimed made some its overseas subsidiaries pay tax twice.
That’s good PR, unless you view it as Sorrell & Co pushing HMG around. Yanking £200m out of a publicly-owned broadcaster would be extremely bad PR: a reminder to everyone that massive marcoms companies wield a huge amount of power, power than can endanger the UK’s (currently) admirably diverse media make-up. At the very least such a decision would result in savage cuts to spending on programmes at C4 – bad for the great British public, one would have thought.
We’ll see what happens. There is much noisy sabre-rattlling on the part of media owners as well as agencies as the negotiating season draws to a close.
But it might be timely for Sir Martin Sorrell to give C4 CEO David Abraham (left) a ring. I’m sure the rottweilers at GroupM do a good job for their clients but there’s a bit more than a good deal at stake here.