Starcom Motive, which won the £21m media account from Carat last year, is trying to renegotiate Cadbury's contract with ITV, including the £10m it pays each year to sponsor Coronation Street. A further £5m was spent last year on ITV spot advertising.
There is a two-week grace period following the expiry of the 2003 contract, but if the impasse isn't resolved, Cadbury's credits are likely to be dropped from Coronation Street by the end of this week.
ITV is said to be talking to alternative advertisers about the sponsorship, which is easily its biggest single earner.
But industry sources point out it could take months for ITV to find a replacement sponsor willing to pay such a large amount, and to get sponsorship credits produced. ITV is therefore faced with losing several months of revenue, or reaching a resolution with Starcom Motive.
Rival media agencies suggested that Starcom Motive had won the Cadbury account by promising to reduce the sponsorship fee paid to ITV, and had over-committed itself.
A Cadbury spokesman said the company remained hopeful that a deal to continue the sponsorship could be agreed. He claimed negotiations had been stalled by the merger of Granada and Carlton, and had been complicated by Cadbury's switch of media agency in October.
Three other media agencies, said to be MindShare, MediaCom and ZenithOptimedia, are also embroiled in disputes with ITV over the terms of new 2004 agency contracts. Their clients' advertising is currently running on ITV, again on a two-week grace basis, and if not resolved by the end of the week may be referred to Ofcom's adjudicator David Connolly.
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