The TV airtime market has been hit by a bout of agency overdealing for the second year running.
A major media buying company is understood to owe 2m to an ITV sales house because of a shortfall in its clients’ TV spend.
The debt was caused by the agency receiving discounts on a promised level of spend that its clients failed to achieve.
When the clients fails to spend the required amount the sales house can theoretically claim cash back from the agency for the overpaid discount.
Last year, five major buying points were understood to owe TV companies money.
The agency in question this year has been hit by the weak nature of the third and fourth quarter TV market.
Agencies have downgraded their estimates for this year’s TV revenue (MW July 26) because of a decline in year-on-year ad spend during August and the key month of September, the beginning of the autumn programme season.
While TV sales houses have in the past threatened court action to recover overpaid discounts, debts are usually settled by carrying over to the following year.
Last year ITV’s sales houses proposed a charter between themselves and TV buyers, that would pledge ITV not to overdeal its airtime – sell bigger audiences than it has available – and the buyers not to overstate their clients’ spend (MW August 11 1995).