The Scottish Channel 3 franchise owner’s relationship with the ITV (LSE: ITV) mothership is heading for break-up but, in the meantime, let the lawsuits fly…
STV was already being sued by ITV for £38 million it claims it’s losing by STV not screening its programmes in Scotland. Now it’s launched a £35 million counter-claim for alleged unpaid advertising income and is suing over new media rights.
Its gripe – that, though STV acquires rights for linear ITV television shows, ITV Network itself, and not the franchises, has been licensing the new-media rights for those shows as VOD.
It stands to reason that STV wants to exploit its TV shows for itself in a VOD environment, especially if it wants to break away from the ITV network in the medium term (while ITV runs its own ITV Player, STV already operates its own, breakaway STV Player, showing ITV shows like Coronation Street).
As we reported in September, Ofcom ruled (page 29) that ITV should give more information to Channel 3 franchise owners about the VOD deals it’s doing, and proposed changing rules so that “rights acquired by ITV Network on behalf of the network as a whole are available for use by all licensees on an equivalent basis”.
ITV agreed that franchise owners could exploit VOD rights for themselves if VOD technologies supported geoblocking within their region – virtually impossible on most STBs.
STV Group plc – STV Group plc files legal claim regarding new media rights against ITV Network and ITV Broadcasting
STV Group plc announces that its wholly owned subsidiaries STV Central Limited and STV North Limited have issued legal proceedings against ITV Network Limited and ITV Broadcasting Limited relating to the exploitation of new media rights.
Despite the new media rights being acquired and held for the benefit of all Channel 3 licensees, ITV Network and ITV Broadcasting have entered into commercial agreements without obtaining STV’s consent. These commercial agreements use and exploit new media rights in STV Central and STV North’s licence areas. A claim seeking damages; declaratory relief to determine the precise basis on which such right are held; and an injunction to prevent ITV Network and/or ITV Broadcasting from entering into any further new media rights agreements without STV’s consent, was filed on 16 November 2009. Although the amount of damages will require expert evidence to determine STV estimates that they could be up to £12m.
Separately, in response to the proceedings issued by ITV, on 13 November 2009 STV submitted its Defence, including claims against ITV for £35m and an additional counter-claim in respect of the conduct of the Airtime Sales Agreement by ITV Consumer.
STV is also expecting to file further claims regarding significant prejudicial behaviour on the part of ITV Network and ITV plc. An update on this will be made shortly.
Updated: Quote from STV CEO Rob Woodward: