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ITV's call for the scrapping of the contract rights renewal mechanism has re-emerged with a vengeance - and no longer is the broadcaster a lone voice on the subject.

Bernard Balderston, associate director for UK and Irish media at Procter & Gamble, has warned advertisers they are in danger of killing off the golden goose if the advertising exodus from ITV1, which CRR has facilitated, continues.

ITV claims that CRR has made the business model for ITV1 unsustainable and is urging advertisers and Ofcom to act, warning that cutbacks to the schedule are on the horizon.

Until now ITV's campaigning behind the scenes has been met with scorn by advertisers, agencies and broadcasting rivals, who point out that ITV was only too happy to accept CRR as a price for getting the Carlton and Granada merger past the competition authorities.

But Ian McCulloch, commercial director at ITV, hopes the tide is turning. "Advertisers have exploited CRR, but we're reaching the point where the model is unsustainable," he says.

"We're already two thirds of the way through commissioning for 2007 and we're worried that we won't have the revenue to support it. If we can't commission the sort of first-run dramas that ITV is known for, then the viewers and advertisers will suffer.

"The more mature advertisers are starting to realise that something has got to be done. The revenue situation in the market has thrown it into stark relief. It's no longer an issue for a few years down the line. This is a right-now issue."

Superficial view

Balderston adds: "There has been a view that ITV's viewing figures will improve if ITV invests more money in programming. That's obviously becoming a very superficial view. Even if it puts 50% more on its programming budget, I don't think it would make much of a difference."

The FMCG giant - the biggest advertiser on TV - has more to gain than most from the survival of a mass-market vehicle like ITV1. But the biggest advertiser of all, Unilever, is standing squarely behind the principles of CRR.

Ilker Shakir, investment director for Unilever at MindShare, says the decision to slash the value of Unilever's four-year advertising deal across ITV - from £320m to £200m - in March, reflected the "sound business principle" that falling audiences should lead to reduced investment.

"I would like to see more investment in programming by ITV and certainly more variety," says Shakir, who claims ITV is more concerned about saving money for its investors in the City than for programming.

However, Jim Marshall, chairman of Starcom UK Group and chairman of the Institute of Practitoners in Advertising's media futures group, describes CRR as a "blunt, indiscriminate and antiquated tool".

He adds: "There is a genuine concern that what's happening will undermine ITV's ability to continue investing in programmes that deliver mass audiences." Marshall urges the IPA and ISBA to call for Ofcom to put the market review back on the agenda.

Such a move would be fiercely resisted by ITV's rivals. Channel 4 is determined to keep its foot on ITV's neck, having made the best part of £70m in ad revenue from ITV1 this year. Andy Barnes, sales director, denies CRR has become a weapon for ITV's rivals. "What it has done is prevent a dominant player in the market place from misusing its power," he says. "Last year, ITV had 48% of the ad market. In any other market that would be treated as a monopoly."

Advertiser concerns

A spokesman for ISBA says: "The vast majority of advertisers are supportive of CRR remaining in place.

"ITV's share in the market must descend to a reasonable level before our members would want it removed, although we do want ITV1 to do well. But advertisers are concerned about the opportunities ITV would have to use its power in negotiations if CRR was removed."

Some insist CRR should remain in place until ITV's share in the market falls as low as 25% - a nightmare scenario for the broadcaster. While stressing ITV cannot blame all its woes on CRR, Marshall says the time is right to put the issue back on the table. "Maybe the advertising fraternity will look at ITV's situation and say there's nothing wrong with a slimmed-down ITV1, but you have to strip the emotion out of this situation and look at it CRR in an objective fashion."

Objectivity and a lack of emotion have seldom been mentioned in the same breath as CRR.

CRR MECHANISM

- Introduced to the advertising market in November 2003, the contract rights renewal mechanism was put into place to stop the merger of Carlton and Granada giving ITV an unfair dominance of the TV advertising market.

- The mechanism prevents ITV from raising its prices to make up for falling audiences, pinning agency discounts to pre-merger agreements and preventing conditional selling across ITV1 and the broadcaster's digital channels.

- CRR has become the basis under which TV trading has been traded, not just for ITV but for its rivals. In the last negotiating season, Channel 4 demanded from agencies half of all money coming out of ITV1 (upwards of £150m) and it's believed to have increased its share by nearly £70m - not far short of its target.

- In his last report before stepping down as the Ofcom TV adjudicator, David Connolly described the process he was brought in to police as resulting in a "battle of wills with agencies constantly looking out for what they perceived as attempts to bend the rules, leading to an overriding sense that any relaxation would be viewed as weakness and open them to exploitation."

- CRR, says Connolly, has been "broadly successful" in protecting advertisers and agencies. "With a full three-deal seasons having been operated under CRR, the remedy has become an accepted component of the airtime trading system," he says.