ITV appeals to MPs for lifting of ad rules

ITV appealed today to be released from advertising sale restrictions it says have locked it into a "ratings rat race" at the expense of quality programmes.

Chief executive Adam Crozier said the contracts rights renewal (CRR) rules were out of date and had resulted in a "remarkable lack of diversity" on screen.

Airing another episode of a soap was preferable to investing in quality new drama because of the system, he said, promising higher-quality shows if it was axed.

CRR was introduced to protect advertisers from the firm's dominant position when Carlton and Granada merged to form ITV in 2003.

It cuts the amount advertisers have to pay if ITV1's audience shrinks, which has hit ITV hard in recent years, adding to an already depressed ad market.

In May, the Competition Commission rejected ITV's bid to have CRR lifted, saying it believed the broadcaster had overstated the cost and distortions imposed by the mechanism.

Giving evidence to the House of Lords communications committee Mr Crozier said advertising revenue had fallen 22% since CRR was introduced - directly affecting programme quality.

He said the firm wanted to generate new British programmes - and sell them abroad - but was hamstring from doing so by restrictions that bore no relation to today's market.

There was now "a remarkable lack of diversity compared to then simply because of the way the market works", he said - an unintended consequence of the original deal.

ITV chairman Archie Norman, a former Tory MP, told the peers: "We want ITV to become a global business, selling UK content around the world."

But CRR "drives us towards the lowest common denominator all the time" because that is where the biggest advertising revenues can be made.

"We need to be able to move away from the ratings rat race," he said.