LONDON, ENGLAND – MARCH 10: Piers Morgan seen leaving his West London home to take his daughter Elise to school
Photo by MWE / GC Images
ITV stocks were down 3.8% on Wednesday after high profile host Piers Morgan resigned over his comments on Meghan, the Duchess of Sussex and her bombshell interview with Oprah Winfrey.
The British broadcaster confirmed Morgan’s departure in a statement Tuesday, hours after he stormed the set of the “Good Morning Britain” show, which gained record market share this month after criticism of his comments.
Tuesday’s broadcast drew more than 41,000 complaints to UK television authority Ofcom, which has since confirmed it was investigating the comments. Morgan accused Meghan of lying because she had suicidal depression and had not received any help during her time as a member of the royal family.
ITV also reported a 33.5% drop in operating profit for 2020 and a sharp drop in advertising revenue on Tuesday. Analysts found that an accelerated move to streaming services made life difficult for broadcasters who rely on traditional television advertising.
Roddy Davidson, media analyst at Shore Capital, who covers the stock, told CNBC on Wednesday that Morgan’s departure may have played a role in the continued decline in the company’s shares, but suggested Tuesday’s earnings were still the next, alongside the potential The main driver of the share price movement is profit-taking by investors after a strong last six months.
“Good morning UK is an important part of the daily schedule and Piers Morgan is a bit of a Marmitan character but he’s pretty observable for that, whether you agree or disagree,” said Davidson.
“I thought the disappointing aspect of yesterday’s results was the fact that they didn’t pay a final dividend. Debt has decreased significantly, the company is in strong financial shape, it is cash generating and the comments have certainly been more positive on to the ad revenue line that will rebound when the Covid restrictions are lifted. “
Davidson said the lack of a dividend payment was a “missed opportunity” to reward shareholders after a tumultuous 12 months in which the cancellation of key shows like “Love Island” and accelerating viewers’ transition to streaming services weighed on ITV’s audience .
Russ Mold, investment director at stockbroking platform AJ Bell, also noted that while the Morgan controversy could have an immediate impact, investors should continue to focus on fundamentals.
“I am sure this program is a big spinner for them because it is being viewed incredibly well. It certainly seems to have been important to the success of this program and it will be fascinating to see how it goes on without it,” Mold told CNBC on Wednesday.
However, he suggested that the company’s fierce competition in the streaming market and tough advertising environment, along with takeover speculation, would remain the main drivers of stock price activity.
“If you’re bullish about the stock, you’re looking for an economic upturn, you’re looking for a commercial upswing, and you’re looking for someone who might buy it for their very extensive library of content,” he said.
“The Bear Falls are a tough business environment, a lot of competition and a model that over time may be seriously challenged.”