STV set for new ITV tie-up after dispute

STV chief executive Rob Woodward has raised the prospect of collaboration with ITV in areas beyond its core television interests after the two Channel 3 broadcasters last month settled a long-running legal dispute.

In his first interview since the battle was laid to rest on 27 April, Woodward said the "fundamental modernisation" of STV's working relationship with ITV will eventually stretch beyond the funding of programming - the issue that lay at the heart of the two-year conflict.

The finer details of the 18 million settlement would continue to be ironed out in the coming months, but Woodward said: "It will cover all areas that bind us together, ranging from programming to online and joint promotion.

"It is multi-faceted, and it will touch on literally every point of contact between us and ITV."

The network partners came to loggerheads in 2009 when STV stopped airing a number of high-profile programmes funded through a central pot of cash to which all three Channel 3 broadcasters - including Northern Ireland's UTV - contributed.

The Scottish commercial broadcaster now operates as an affiliate of the ITV network, purchasing programmes on a "pay-as-you-go" basis.

The agreement will substantially reduce STV's working capital requirements and removed the spectre of legal damages that could have amounted to as much as 21m.

This is expected to lead to the resumption of dividend payments by the Scottish broadcaster, though Woodward said the company would focus in the short term on further paying down its debts.

"It (the resumption of the dividend] is clearly a matter that will be considered by the board," he said. "With the litigation in the past, we are now in a position to look at returning to dividend payments, but that won't be in 2011."

That would rule out any interim dividend when STV posts its half-year results in the autumn. But it is understood that the board could make an announcement later this year that would pave the way to the reinstatement of a dividend next year.

Meanwhile, Woodward also left the door open to the possibility of some popular ITV programmes returning to air in Scotland.

Analysts have said that although it wouldn't make much commercial sense for STV to bring back broadcasts of the English FA Cup, programming could be reshuffled to include the likes of popular period drama Downton Abbey. Even so, the overall level of STV's opt-out from the ITV schedule is expected to remain around its current level of 5 per cent of peak-time viewing.

"We keep it under constant review," Woodward said of the programming mix. "It is early days at the moment, and I cannot say anything definite one way or the other, but we will be making decisions in due course."