What we learned from STV chief's mauling over cutbacks

Rufus Radcliffe

Like a football management team trying to explain to angry supporters why they were spending a fortune and the club was not top of the league, STV’s top dogs Rufus Radcliffe and Bobby Hain might still be recovering from the mauling they received from MSPs this month.

Appearing before the Scottish Parliament’s Constitution, Europe, External Affairs and Culture Committee, chief executive Mr Radcliffe came in for some particularly hefty flak for a restructuring plan to save up to £3 million and cut 60 jobs, 30 of them in news.

The plan is to scrap the Aberdeen news studio and its nightly bulletin, which some industry observers believe is an overly drastic way to find the savings in a company employing 500 people with operating costs of around £170 million.

But permission is needed from Ofcom to waive conditions in the 10-year STV North licence it signed only in January, and last week all five main party leaders asked the regulator to refuse. It may well do so, and the decision will no doubt be the talk of the room at its Media Nations Scotland presentation this Tuesday.

It’s fair to say Mr Radcliffe was not the committee’s most compelling witness, at one stage being accused by Scottish Conservative Stephen Kerr of resenting the MSP’s admittedly pointed questions.

Mr Kerr didn’t hold back in claiming a 50 per cent fall in STV’s share price was clear evidence he had lost the confidence of shareholders. How, he asked, could they report profit fall of around 37 per cent from last year’s £20.6 million, when 6-month revenues were only down £400,000 on last year? It was a fair question, only partly explained by the investment needed to launch a new Scotland-wide radio station early next year, for which high-profile presenters are already signed up.

With Bauer’s local stations like Forth and Clyde largely centralised and BBC Radio Scotland perpetually in the doldrums ─ also the subject of much political handwringing over plans to replace lumbering old Good Morning Scotland ─ it might seem like a smart move, but insiders believe it will struggle without an FM licence.

These are very hard times for large news companies, all easy targets for politicians who benefit from the profile they provide, even if the journalists are also instrumental in exposing their shortcomings.

Not being subject to the same statutory requirements as public broadcast service providers, news publishers are generally less of a political football, but the downside is hardly any Scottish government advertising is now spent on press, just £24,000 last year, compared to £628,000 on television, the lion’s share to STV.

After a glittering career as a television marketing executive with Channel 4 and ITV, this is Mr Radcliffe’s first stint in the CEO’s hot seat and at the committee it must have felt like sitting on a barbecue.

In some ways his evidence felt reminiscent of the big Scottish banks before the crash, with the likes of Fred Goodwin and James Crosby determined to put profitable, comfortable Scottish institutions on the global stage, and he repeatedly spoke about the need to transform STV into an international business able to compete with the likes of YouTube.

But maybe the stark reality is his ambition isn’t matched by reality and STV’s inescapable fate is to be acquired.