ITV reaps £18m legal deal

The legal row that has dogged broadcaster ITV and its Scottish counterpart STV Group for two years finally ended today, with STV paying an £18 million settlement.

Shares in the operator of the Channel 3 licence north of the border shot up 12% to 155p as analysts were relieved the costs were lower than feared.

STV is paying a net cash settlement of £4.8 million, as the rest of the deal with ITV is made up of the cost of programming and other rights.

ITV, whose hit TV series includes Downton Abbey, had been claiming as much as £38 million, while STV had launched two counter-claims in the acrimonious dispute which centred on how much ITV content the Scottish broadcaster should carry.

STV dropped all its claims as part of the settlement. Paul Richards, analyst at Numis Securities, said the deal was "transforming" for STV, as it lifted a cloud hanging over the broacaster.

The settlement matters less to ITV, a much bigger business. But its shares sagged 3%, or 2.1p, to 73.6p as analysts are more worried about the advertising outlook.