2nd Jul 2015 11:24
LONDON (Alliance News) - Liberum reiterates its Buy rating on ITV after UK media and communications regulator Ofcom published its review of public service broadcasting in Britain.
The broker also has a 330 pence price target on the stock. Shares trade 1.6% lower at 262.90p.
Last year, ITV said subscription TV broadcasters should pay UK public service broadcasters justly for the transmission of their channels and said the UK Government should end what it describes as an effective subsidy for Sky and Virgin Media.
Ofcom warns that the debate surrounding retransmission fees may result in extra funding but may result in more regulation due to the complexity of implementing a new scheme to govern this.
Liberum says Ofcom's warning does not suggest the regulator is against retransmission, rather it is highlighting the difficulties and roadblocks to introduce such an issue. Liberum also suggests the Government is leaning towards backing retransmission revenues.
"On retransmission, Ofcom's conclusions seem to be mixed. However, it is worth noting that the Government will take the final decision and there are suggestions it may be moving towards allowing such fees for the five main channels," Liberum says.
The UK government is expected to make a final decision on retransmission fees sometime in late 2015 or early 2016. The broker does not factor in retransmission fees into its forecasts.
By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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