ITV is poised to hit Virgin Media with a hefty bill for carrying its main channel backed with a tacit threat of a blackout if it refuses to pay up.
The broadcaster plans to issue the demand to the cable operator, which is owned by its own largest shareholder Liberty Global, in the next few weeks.
It could seize on a planned renegotiation of its existing commercial deal with Virgin Media on ITV2 to force a discussion for the first time about payments for its main channel.
ITV will rely on new laws that come into force next week and scrap a copyright exemption that allows Virgin Media to carry its main public service channel for free without fear of legal action.
The change could one day affect Sky too, as over the long term it plans to shift its pay-TV customers off satellite and deliver channels over the internet.
Virgin Media, which declined to comment on the impending battle, is resisting any attempt to make it pay for channels that are freely available via Freeview or satellite.
Cable television households could be forced to switch to terrestrial signals to watch ITV if the broadcaster carries out its threat to withdraw its main channel.
Sir Peter Bazalgette, ITV’s chairman, said that the broadcaster wanted to be compensated for its investment in programming as it reported a sharp drop in advertising sales.
Profits sank 16pc in the first half of the year as brands curbed spending in response to political and economic tremors and ITV spent more on making big-budget dramas.
The broadcaster is awaiting the arrival of easyJet’s Carolyn McCall as chief executive in January.
It sought to reassure investors about its underlying strength by increasing its interim dividend 5pc despite the tough market conditions.
This had the intended effect, as ITV shares rose more than 2.4pc.
Barclays analysts called its performance “bad, but not as bad as feared” as penny pinching helped it beat cost targets.
Most of the fall in pre-tax profits to £259m was accounted for by an 8pc decline in advertising sales, which ITV blamed on uncertainties related to Brexit and the general election, insisting that television remains a “robust” market despite some spending and viewing shifting online.
It meant ITV’s overall first-half revenues were down 3pc at £1.46bn, as struggles in the advertising market were partly offset by increased programme sales.
ITV Studios, the production business rapidly assembled by acquisitions over the last few years, reported a 7pc increase in revenues.
It also weighed on profitability, however, as the broadcaster ploughed cash into its US arm’s attempts to take a bigger slice of the expanding market for expensive dramas.
Ian Griffiths, ITV’s chief operating officer, said the investment would pay off in the second half of the year.
Debt, which increased sharply in the first half to more than £1bn as the broadcaster made a big payment on its takeover of Talpa, maker of the Voice, will also come down, he added.
ITV highlighted the strong performance of the reality programme Love Island, which it said “demonstrates that young viewers engage in great TV content”.
The broadcaster increased its share of 16 to 34-year-olds watching commercial channels by 15pc.
Sir Peter, who is running the company with its chief operating officer, said: “ITV continues to deliver the mass audiences demanded by advertisers as well as delivering the key target demographics. ITV is the only channel to deliver a commercial audience over five million.”
© Telegraph Media Group Limited 2017.