October 19, 2007

ITV faces £70m phone scandal fine

The results of the investigation carried out by accountants Deloitte into the premium-rate phone-line scandal at ITV could lead to fines of up to £70m (US$140m) for the UK broadcaster and possible criminal investigations if regulator Ofcom decides to pass the case on to Scotland Yard.

Only parts of the Deloitte report were made public by ITV yesterday but the headline figures will make uneasy reading for the interactive TV sector. Viewers spent £8m on phone calls to ITV competitions they thought they were influencing. The full cost of the scandal could rise to £18m.

ITV chief executive Michael Grade said no senior ITV executives would lose their jobs over the scandal because running the investigation on the basis of finding someone to sack “would not have produced a full and frank” picture. When questioned about possible criminal charges of fraud for those involved in the deception, Grade insisted that their motives were not to increase revenues but to produce better television shows. He then pledged a ‘zero tolerance’ policy on any future transgression and praised his company for its openness in the matter.

The investigation found serious “editorial issues” going as far back as 2005 with flagship ITV shows such as Saturday Night Takeaway, X-Factor and Soapstar Superstar. Some of the charges include the producers manufacturing the results of viewer phone-ins by disregarding voter requests and picking songs they thought would be more suitable for contestants to sing or picking winners of cash competitions only if they lived within an hour of where the production team happened to be.