Based on the closing share prices from last night, it is expected that ITV will be replaced in the FTSE 100 by B&M, the discount retailer.
This will be the first time for nearly 10 years that the broadcaster will not have a place in the FTSE 100. The last time ITV lost its FTSE 100 spot and was relegated to the FTSE 250 was back in the financial crisis of 2008. And the current change is directly because of the impact on its share price of the massive 42% drop in advertising revenue in the second trading quarter as a result of the UK lockdown. The fall in its share price meant ITV lost almost two thirds of its market value.
The lockdown caused a double blow to ITV because it meant that the bulk of businesses shut down after the March 23 national lockdown announcement and so stopped spending on advertising. And it also meant that the TV broadcaster had to stop filming and creating some of its most popular shows that were so critical in attracting advertisers. And of course it’s advertising revenue that makes the difference to the ITV share price and not the viewing figures for these popular programmes.
Now that the lockdown is lifted how long will it take for ITV to get back into the FTSE 100 when filming schedules aren’t yet back to normal?