THE new boss of STV has declared the broadcaster’s commitment to news journalism is as strong as ever, despite axing nearly 60 posts as part of a strategic review.

Simon Pitts, who succeeded long-standing chief executive Rob Woodward in January, has brought down the curtain on the company’s loss-making STV2 channel with the loss of 25 jobs. The digital channel, which has only been on air since April last year, was anchored on its flagship seven o’clock news programme.

At the same time, STV said a further 34 jobs will go under a review of the broadcaster’s news output.

HeraldScotland:

(Picture credit: Colin Mearns)

The National Union of Journalists described the cuts as a “devastating blow to the staff”, claiming that the decision would “lead to a massive reduction in the breadth and depth of news coverage viewers in Scotland currently enjoy.”

Asked whether STV’s commitment to news has been brought into questioned by the cuts, Mr Pitts replied: “Our six o’clock bulletin delivers brilliant ratings, but it’s also fair to say that news consumption is changing rapidly, with most news stories these days broken in a social feed rather than in a scheduled TV bulletin.

“And like every other news organisation we need to change to stay relevant.”

The cuts come after STV reported a three per cent fall in profits to £18 million in March amid weak conditions in the advertising market.

Mr Pitts, who joined the company from ITV, said STV will invest to give its journalists “better connectivity” in the field, and in more training for reporters. “I would say that we are as committed as ever to local Scottish news,” he said. “We are re-affirming our commitment to STV North and to STV Central news, the separate programmes, and we are confident we will come out of this with an even better news service: truly cross-platform and powered by a single team of multi-media journalists.”

STV said the cuts were made in response to challenging economic conditions in the local TV market, as well as the threat posted by BBC’s Scotland’s multi-million investment in a new channel, which will have a major focus on news and current affairs.

The broadcaster, which will shift the STV 2 content to its main channel and the STV Player, expects to save £1 million per year by closing the digital channel. It will save the same amount by revamping its news output through the STV News 2020 strategy.

And it said those savings, alongside “other redirected content spend”, will contribute to £15 million worth of investment into new, original content over the next three years. STV Productions has secured 30% more revenue so far this year than it did for the full year in 2017, the company said yesterday, and recently won five new documentary commissions from the BBC.

Mr Pitts said the rise of film and TV streaming services from Netflix and Amazon has created “more buyers for high-quality shows. And when you are a producer and a broadcaster like us, that puts you in a very good place. Owning more of your own IP (intellectual property) is absolutely crucial in today’s TV market.”

Mr Pitts said the closure of STV 2 had not been an easy decision “by any means”. He noted: “The team have had some great successes on screen with very limited budgets. Sadly, the way in which we are watching television is changing. The economics of local TV are very tough, and also the expected launch of the new BBC Scotland channel, with probably 15 times STV 2’s programme budget, makes it even more challenging.”

STV said it will incur reorganisation costs of around £5m, of which £2m to £3m will be cash and covered by funds originally earmarked for its share buyback. It increased its proposed, full-year dividend for 2018 by 2p to 20p.

The company expects national advertising revenue to be up 2% in the first half. Regional and digital advertising revenues are expected grow by 20% to 25% over the period, resulting in total advertising growth of 6% for the first half.

STV shares gained 15.5p, closing at 358p.