STV and ITV on a 'Collision' course to the High Court

Scottish franchise's refusal to show major drama is latest blow in a bitter battle.

A screech of tyres, bang! And it was off. The big television event of last week was Collision, ITV's five-part drama that opened with a spectacular car crash, then unravelled the intertwined lives of its characters. But for anyone living north of the border, it might as well never have happened. For Collision is the latest ITV drama to have been denied to viewers of STV, ITV's Scottish licence holder, in an increasingly bitter dispute that looks set to end up in the High Court.

Midsomer Murders, The Bill, Doc Martin – nearly all ITV's mainstream dramas have been pulled by STV in recent months, to be replaced by more Scottish-specific content. So instead of Collision, Scotland was given The Greatest Scot. While this may seem unfair to viewers, it has also enraged ITV, which is suing STV for breach of contract. STV, it says, as the network's licence-fee holder, is obliged to air its programmes. Last month it began legal proceedings to recover £38m, a debt it claims has accumulated as a result of STV not honouring its contribution to the network programme budget.

But STV is not about to hand over the cash. Last week it made a robust defence of its actions and issued a counter-demand for £35m, money it says ITV owes it from TV ad sales and video-on-demand rights.

The underlying problem stems from the conflicts inherent within a channel that is at once independent but also the sole licence-holder of Scotland's ITV network, 92 per cent of which is owned by ITV. Since becoming chief executive of STV two and a half years ago, Rob Woodward has made it clear he wants to increase the channel's regional content, as he told a Westminster briefing last year, and is determined the channel should reflect the interests of Scottish viewers.

As far as ITV is concerned, STV does not have the right to pull ITV shows when it likes. It says it is a simple case of a licence-holder failing to meet its obligations, and it is confident it will be proved right in court.

"They want to have their cake and eat it," says an ITV spokesman, "Either STV is in the ITV network, benefiting from – in effect – a volume discount for taking the schedule, or it isn't part of the ITV network and therefore pays a market rate for those programmes it wants to carry. STV's opt-out strategy attempts to get the full benefits of being a member of the network without carrying its fair share of the financial obligations."

In the course of recent talks between the channels, it has emerged that both want the same outcome – a more distant relationship, like that between ITV and TV3 in Ireland, which buys in ITV shows as and when it wants and is in no way subsidised by ITV.

An STV spokesman says its decision to opt out of the schedule is reasonable, given that the channel has no say in the contract. "We are not party to decisions about the budget or the schedule, and are forced to accept what is given to us," he said. "We have no idea what is in next year's schedule so how can we be expected to agree to it?" But an ITV spokesman strongly refutes that suggestion, pointing out that STV, like all licencees, is represented on the ITV Council, when these decisions are discussed.

The row has been escalating for over a year, partly as a result of the downturn in advertising. Before, if STV pulled a programme, it might not have been so vigorously challenged, but now that ITV is running at a loss, the channel is keen to enforce contract terms and recover any money owed. STV is also attempting to save money, and last month the channel's director of content, Alan Clements, admitted that by not broadcasting ITV shows it would save £4.5m this year. Clements added that the company was "cutting its cloth sensibly" and making a profit while ITV had been posting losses. According to another STV insider, ITV's proposed schedule for next year is already set to make a loss, and STV does not want to agree to it: "for us it's neither relevent or affordable.."

The real question is, what do the viewers want? Collision, or The Greatest Scot? Figures for last Monday show that The Greatest Scot drew 13 per cent of Scotland's audience, with 257,000 viewers, while Collision drew 7.5 million of the UK audience, a 30 per cent share. Nevertheless, Woodward is adamant that STV "must reflect the fact that Scotland is a devolved nation."

The Department for Culture began a 12-week consultation earlier this month to decide whether STV can qualify for independence. If it did, it would have to pay market rates for ITV content, but it would have the advantage of pitching commissions to other broadcasters, such as the BBC. Such an outcome would seem to be welcomed by everyone, but until then, the only winners will be the lawyers.