The Belfast-based group has transformed its fortunes since buying Kelvin MacKenzie's station, and now has global plans
*This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at UTV Media*
When UTV Media bought Kelvin MacKenzie's TalkSport in 2005, the BBC still had exclusive live radio rights to all Premier League football. Times have changed. Last week, TalkSport retained the rights to broadcast 64 live top-flight games for another three years. The BBC, which has seen its sports rights budgets cut, held onto the lion's share (128), with Absolute Radio bagging a further 32.
TalkSport, bought as part of the Wireless Group for £98.2m, has transformed the fortunes of UTV, the ITV franchise holder in Northern Ireland. A decade ago, 84% of its operating profit came from TV. Fast-forward to its latest full-year results, in 2012, and marginally less – 80% – of its operating profit now comes from radio.
The bulk of this came from TalkSport. With just over 3 million listeners in the final quarter of last year, it has increased its audience by nearly a million since it was bought by UTV eight years ago. The station made operating profits of £7.9m in 2012, a third of UTV's group operating profit of £23.9m. Of UTV's total group revenue of £120.1m, a quarter (£32.9m) came from TalkSport.
But gains from its flourishing radio arm – Belfast-based UTV also owns 13 local stations in the UK and a further seven either side of the Irish border – were more than wiped out by declining profits in its TV operations, down 39% year on year to £3.9m, and digital. UTV was hit by the severe economic downturn in Ireland, where it has many viewers (available in 70% of homes) and where the advertising market has slumped 50% in five years.
"It is probably the most cyclically exposed listed media company in the UK because nearly all of its revenues are advertising-based, either television or radio," says Patrick Yau, media analyst at Peel Hunt. "As a result, the company's revenues are very sensitive to the economic cycle and consumer confidence. It has no significant production or digital activities with which to insulate itself."
Overall, pre-tax profit fell to £21m in 2012, down from £23.3m in 2011. Turnover of £120.1m was down from £121.6m in the previous year. "The UK advertising market has been like a walk in the park compared to Ireland," says UTV Media chief executive John McCann, the former chartered accountant who joined the company in 1983. "But despite our reliance on advertising we actually made record profits [in 2011] and unlike most of our competitors we never stopped paying a dividend."
On-off merger talks with STV, the ITV licensee in Scotland, (and now the only other one not owned by ITV plc) came to nothing in 2006. A tie-up would make less sense today, given STV's sale of Virgin (now Absolute) Radio in 2008.
UTV later turned its attention to loss-making Absolute, now controlled by the Times of India owner, Bennett, Coleman & Co; the two male-skewed stations would have made a good fit but the asking price exceeded what UTV was prepared to pay.
But there could be acquisitions to come with Capital and Heart owner Global Radio likely to have to sell some stations in order to win competition clearance for its £70m purchase of GMG Radio. "We will look to see what opportunities arise out of that," says McCann.
UTV spent £7,000 on free weekly magazine Sport in 2009, after its previous owners went into administration, and rather more – £1.7m (rising to £5m depending on future performance) – on a Dublin-based social media agency, Simply Zesty, last year.
Former Chrysalis chief executive Richard Huntingford was appointed UTV's chairman last year, after a boardroom coup 14 months ago which led to the ousting of his predecessor John McGuckian in a row over his "close association" with the group's biggest shareholder, TVC Holdings. "It is all behind us," says McCann. "It seems like a lifetime ago." Two non-executive directors also departed and have since been replaced.
Paul Richards, analyst at Numis Securities, said recently UTV has shown "resilience through the worst of times" and is "particularly well positioned to benefit from any recovery" in advertising.
It is also looking further afield and hopes to make TalkSport a global brand after buying up the international rights to live Premier League football outside Europe; it now broadcasts all 380 top-flight matches in English, Spanish and Mandarin. The venture cost UTV £900,000 last year but will break even this year and turn a profit in the 2013/14 season.
Year-on-year comparisons for the first six months of 2013 will be tough, with the whole of Euro 2012 in the first half of last year, but UTV is expected to perform better in the second half. "2013 is a fallow year with not many major sporting events," says Yau. "TalkSport has been going well in the UK, but the Republic of Ireland is still quite a depressed marketplace and until that starts to improve it is going to be very difficult for it to generate significant growth."
Next year's football World Cup in Brazil, however, will be a double boost, both for TalkSport and its UTV television operation, which will share the rights with the BBC. In the meantime, TalkSport has exclusive rights to this summer's British and Irish Lions' rugby tour to Australia.
*The numbers* Reported by guardian.co.uk 11 hours ago.
*This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at UTV Media*
When UTV Media bought Kelvin MacKenzie's TalkSport in 2005, the BBC still had exclusive live radio rights to all Premier League football. Times have changed. Last week, TalkSport retained the rights to broadcast 64 live top-flight games for another three years. The BBC, which has seen its sports rights budgets cut, held onto the lion's share (128), with Absolute Radio bagging a further 32.
TalkSport, bought as part of the Wireless Group for £98.2m, has transformed the fortunes of UTV, the ITV franchise holder in Northern Ireland. A decade ago, 84% of its operating profit came from TV. Fast-forward to its latest full-year results, in 2012, and marginally less – 80% – of its operating profit now comes from radio.
The bulk of this came from TalkSport. With just over 3 million listeners in the final quarter of last year, it has increased its audience by nearly a million since it was bought by UTV eight years ago. The station made operating profits of £7.9m in 2012, a third of UTV's group operating profit of £23.9m. Of UTV's total group revenue of £120.1m, a quarter (£32.9m) came from TalkSport.
But gains from its flourishing radio arm – Belfast-based UTV also owns 13 local stations in the UK and a further seven either side of the Irish border – were more than wiped out by declining profits in its TV operations, down 39% year on year to £3.9m, and digital. UTV was hit by the severe economic downturn in Ireland, where it has many viewers (available in 70% of homes) and where the advertising market has slumped 50% in five years.
"It is probably the most cyclically exposed listed media company in the UK because nearly all of its revenues are advertising-based, either television or radio," says Patrick Yau, media analyst at Peel Hunt. "As a result, the company's revenues are very sensitive to the economic cycle and consumer confidence. It has no significant production or digital activities with which to insulate itself."
Overall, pre-tax profit fell to £21m in 2012, down from £23.3m in 2011. Turnover of £120.1m was down from £121.6m in the previous year. "The UK advertising market has been like a walk in the park compared to Ireland," says UTV Media chief executive John McCann, the former chartered accountant who joined the company in 1983. "But despite our reliance on advertising we actually made record profits [in 2011] and unlike most of our competitors we never stopped paying a dividend."
On-off merger talks with STV, the ITV licensee in Scotland, (and now the only other one not owned by ITV plc) came to nothing in 2006. A tie-up would make less sense today, given STV's sale of Virgin (now Absolute) Radio in 2008.
UTV later turned its attention to loss-making Absolute, now controlled by the Times of India owner, Bennett, Coleman & Co; the two male-skewed stations would have made a good fit but the asking price exceeded what UTV was prepared to pay.
But there could be acquisitions to come with Capital and Heart owner Global Radio likely to have to sell some stations in order to win competition clearance for its £70m purchase of GMG Radio. "We will look to see what opportunities arise out of that," says McCann.
UTV spent £7,000 on free weekly magazine Sport in 2009, after its previous owners went into administration, and rather more – £1.7m (rising to £5m depending on future performance) – on a Dublin-based social media agency, Simply Zesty, last year.
Former Chrysalis chief executive Richard Huntingford was appointed UTV's chairman last year, after a boardroom coup 14 months ago which led to the ousting of his predecessor John McGuckian in a row over his "close association" with the group's biggest shareholder, TVC Holdings. "It is all behind us," says McCann. "It seems like a lifetime ago." Two non-executive directors also departed and have since been replaced.
Paul Richards, analyst at Numis Securities, said recently UTV has shown "resilience through the worst of times" and is "particularly well positioned to benefit from any recovery" in advertising.
It is also looking further afield and hopes to make TalkSport a global brand after buying up the international rights to live Premier League football outside Europe; it now broadcasts all 380 top-flight matches in English, Spanish and Mandarin. The venture cost UTV £900,000 last year but will break even this year and turn a profit in the 2013/14 season.
Year-on-year comparisons for the first six months of 2013 will be tough, with the whole of Euro 2012 in the first half of last year, but UTV is expected to perform better in the second half. "2013 is a fallow year with not many major sporting events," says Yau. "TalkSport has been going well in the UK, but the Republic of Ireland is still quite a depressed marketplace and until that starts to improve it is going to be very difficult for it to generate significant growth."
Next year's football World Cup in Brazil, however, will be a double boost, both for TalkSport and its UTV television operation, which will share the rights with the BBC. In the meantime, TalkSport has exclusive rights to this summer's British and Irish Lions' rugby tour to Australia.
*The numbers* Reported by guardian.co.uk 11 hours ago.