STV Group plc

STV Group plc, previously known as Scottish Television plc and Scottish Media Group plc, is a Scottish media company. It is a constituent of the FTSE SmallCap Index. Originally formed as Scottish Television, the ITV licence holder for central Scotland, the company changed its name to Scottish Media Group in 1996 and acquired the licence holder for Northern Scotland, Grampian Television, in 1997. The Scottish and Grampian channels were rebranded as STV in 2006.

History
Scottish Television began broadcasting in August 1957. The company changed its name to Scottish Media Group in 1996 when it acquired Caledonian Publishing, owners of Glasgow-based newspapers The Herald and Evening Times (both of which have since been sold). It went on to acquire the ITV licence holder for Northern Scotland, Grampian Television in June 1997. In August 1997 the company acquired a 15% stake in UTV, Northern Ireland. In 1999 it launched a new Sunday broadsheet newspaper, the Sunday Herald. The company was renamed "SMG plc" in 2000, by which time it had expanded further through the acquisitions of Primesight (outdoor advertising), Pearl & Dean and Ginger Media Group, which included Ginger Television and the original Virgin Radio UK radio station. Talks were also held which could have led to Border Television and Ulster Television being bought, but they came to nothing.

On 24 March 1999, Mirror Group sold its 18.6% stake in SMG to Granada. During the summer, the STV Group held talks about buying out the other shareholders in GMTV, with Disney believed to be keen on the idea; many city observers believed this was a defensive move to fend off a takeover bid from Granada. By September an agreement had been reached to acquire Guardian Media Group's 15% stake in GMTV for £20 million, but both Carlton and Granada objected to the deal. Guardian Media Group eventually sold its stake for £18m in January 2000, but STV Group only acquired 5% with the remaining 10% going to Carlton and Granada, resulting in each of STV Group, Carlton, Granada and Disney holding 25% of GMTV.

In September 1999, the company acquired a 37.4% stake in Heart of Midlothian F.C. for £8 million. A few days later the company unveiled its interim results with its pre-tax profits up 2 per cent to £24 million on a turnover of £111.2 million.

In December 2000, the group acquired a 14.9% stake in Scottish Radio Holdings, in anticipation of a relaxation of radio ownership rules and within four months increased this to 27.7%. By 2004 the company sold their 27.8% stake in Scottish Radio Holdings to EMAP for £90 million in anticipation of consolidation in the radio market.

Flextech owner Telewest sold its 16.9% stake in STV Group to an investment bank for £45 million as part of their plan to raise funds to help clear off debt. Throughout 2003/2004 rumours appeared about the company being broken up, with its ITV interests being sold off in an attempt to wipe out its £380m debt and boost its balance sheet. However, the group instead sold the Herald newspapers and its stake in Scottish Radio Holdings. In late 2003 Northern Ireland's UTV, in partnership with venture capital group 3i and Scottish Radio Holdings, sought to acquire SMG for £400 million, but they withdrew the offer as they felt the share price was too high.

In September 2004, ITV plc purchased STV Group's 25% stake in GMTV for £31 million, after being given the go ahead from the Office of Fair Trading, despite advertiser fears it could give ITV influence over pricing. SMG said "SMG are pulling out of GMTV because it did not want to hold a minority interest in someone else's media business".

Andrew Flanagan unexpectedly resigned as chief executive in July 2006. Although he helped create the company since 1998, his spell in charge will be remembered by many in the television industry as a period which saw a dramatic decline in the amount of programmes made by the company for transmission within Scotland alone.

Rob Woodward became the new chief executive in 2007, and started a major reconstruction of the group by instigating a sell-off of poorly performing assets, starting with Primesight being sold for £62m to a private equity firm. SMG said in a statement that the price GMT Communications Partners paid represented a "clear uplift" on offers previously received for Primesight. Primesight have been prosecuted a number of times for the display of advertisements without consent which is an offence under UK Planning Acts. The lack of consent for many of Primesight's displays is said to have reduced the selling price by up to £30 million.

Further major changes occurred when STV Group sold Virgin Radio to a group led by The Times of India on 31 May 2008.

In June 2008, SMG plc announced plans to change its name to STV Group plc. The company said the proposed name change was to highlight its renewed focus on television, encompassing the STV Central and STV North franchises, as well as the company's TV production business.

This name change was approved at an extraordinary general meeting in September 2008, along with a new deal resulting in Pearl & Dean handling advertising for Showcase Cinemas, which meant that the Pearl & Dean titles would appear in just under half of UK cinema sites. The new STV Group branding was introduced on 1 October 2008.

By 2010 the group had sold off all non-television assets, including selling cinema advertising company Pearl & Dean for £1 to Image Ltd, a newly formed company backed by Empire Cinemas director Thomas Anderson, with STV still recouping £9.1m from the business due to a 2010 payment from Vue Cinemas. This action helped reduce the group's debt and allowed it to concentrate on its core television businesses. As a result of this, STV Group largely reverted to its Scottish Television plc days, but with the addition of the former Grampian Television and Ginger Productions businesses (the latter retained from the Ginger Media acquisition).

Merger proposals
In September 2006, STV Group (then SMG) officially rejected a merger offer from Northern Irish ITV franchise holder UTV. The merger approach would have given SMG shareholders a 52% stake in the combined company. The Scottish group said its board had examined a revised merger proposal from UTV, but did not believe it reflected the value of the company.

In 2006 ITV plc considered making an offer for STV Group, according to The Mail on Sunday. The newspaper quoted an ITV source as saying John Cresswell, acting chief executive at the broadcaster, was most interested in the group's television franchises, but that any deal would have been for the whole group. SMG warned that its 2006 profit would be materially behind expectations, sending its shares down more than a quarter in value to a 15-year low.

On 10 January 2007, SMG and UTV agreed details of a merger, including a revised share split between the two. UTV would own 54% of the group, with SMG owning the remaining 46%.

This merger was finally rejected at the end of February 2007, and a new board and management team were introduced at SMG shortly afterwards.

Relationship with ITV plc
STV Group plc has had a turbulent relationship with ITV plc and both Carlton and Granada, the predecessor companies that merged to create it. ITV plc owns the ITV franchises in England, Northern Ireland, Wales, Southern Scotland (Dumfries and Galloway and the Scottish Borders), the Isle of Man and the Channel Islands. ITV plc also operates a number of digital channels and websites under the ITV brand. The company threatened to take legal action over the use of the name 'ITV' because it is the name of the Independent Television network, which STV Central and STV North are both part of. One of the problems facing the group is that ITV is the senior partner when it comes to its two TV stations, since London-based ITV effectively controls most of the scheduling and is also responsible for selling STV's advertising airtime.

In September 2009, ITV plc announced it was to launch legal proceedings against STV for a claimed unpaid debt of £38 million from network programming contributions, following STV's practice of dropping a number of network programmes on the STV franchise. At the same time, STV claimed it was also following procedures against ITV plc, for up to £40 million owed to STV under its advertising sales agreements.

STV
STV Group plc owns two Scottish ITV licences: Scottish Television, which covers Central Scotland, and Grampian Television, covering Northern Scotland. On 2 March 2006, it was announced that Scottish Television would revert to using its former brand name of "STV", which it previously used from the start of colour broadcasting in 1969 until 30 August 1985, and which the station was still informally known as in parts of Scotland. Scottish Television became known as STV Central. At the same time, Grampian Television would also become known as STV North, with the one main identity of STV serving the two licences. The rebrand took place on 30 May 2006.

Other channels
The former SMG plc ran its own digital channel, S2, throughout the Scottish and Grampian ITV regions. S2, which aired on the Digital Terrestrial platform, was launched on 30 April 1999 and was replaced by ITV2 just over two years later – as part of a deal with ITV Digital – on 27 July 2001.

Sky Scottish was a satellite television channel operating on the analogue Sky TV service between 1 November 1996 and 31 May 1998. The service was a joint venture between British Sky Broadcasting and SMG. It initially broadcast between 6.00pm and 8.00pm. The channel was closed due to poor ratings.

A high-definition channel, STV HD, launched on 6 June 2010.

On 11 January 2013, STV were awarded two local TV licences by Ofcom to operate digital terrestrial television channels in Glasgow and Edinburgh for up to 12 years. The two channels, STV Glasgow and STV Edinburgh, were to be delivered in partnership with Glasgow Caledonian University and Edinburgh Napier University respectively. STV Glasgow launched on 2 June 2014, and STV Edinburgh launched on 12 January 2015. In March 2015, STV were awarded local licences for the Aberdeen, Ayr and Dundee areas. In April 2017, STV Glasgow and STV Edinburgh were re-branded as STV2. Just over a year later in May 2018, STV announced that it would be closing STV2 on 30 June 2018.

STV Productions
STV Productions (renamed from SMG Productions on 1 October 2008) forms part of the network television production arm of STV Group plc, producing drama, factual, entertainment and children's output from its bases in Glasgow and London for all UK terrestrial networks as well as key satellite and cable channels.

Ginger Productions
Ginger Productions (founded by the presenter Chris Evans), alongside STV Productions, is part of the network production arm of STV Group plc. Based in Waterhouse Square in London, its output focuses on Entertainment and Factual Entertainment. Ginger was acquired as part of SMG's acquisition of the Ginger Media Group in 1999.

STV Creative
STV Creative is the company's commercial production division, based in Glasgow.

Solutions
Solutions is STV's production resources division, providing facilities for studios, outside broadcasts, post-production, corporate events and commercial productions.

stv.tv
The URL stv.tv is the address of the main website of STV. The website currently offers News, Sport, Weather, Entertainment, Competitions, and STV programme information, and TV listings.

STV Cities
STV Cities is a Scottish network of hyper-local, community-based websites and mobile apps. Pilot sites were launched in Aberdeen, Aberdeenshire, Edinburgh, Moray and North & South Lanarkshire. In October 2013 STV launched apps, accompanied by a website, for Aberdeen, Edinburgh, Dundee and Glasgow.

STV Player
STV Player is the video section of the main stv.tv website. It offers catchup of regular STV programming, along with archive STV programmes and exclusive videos.

STV Bingo
STV Bingo was launched in 2006 and is run in partnership with CashCade.

Studios
STV Group's headquarters in Glasgow are based at Pacific Quay, a development situated next to the River Clyde, in July 2006, alongside BBC Scotland's new studios and the Glasgow Science Centre. STV Group's Aberdeen studios moved to a new purpose-built site in the city's Tullos area in 2003, from their previous location (a converted tram shed), which they occupied since Grampian launched in 1961.

STV also has studios in Edinburgh, Dundee and Inverness providing regional news coverage in their particular area.