There are only three weeks until the final bids for the channel 5 licence are due to be delivered to the ITC. May 2 will see some of the largest media companies in Britain competing for the last terrestrial channel licence which will cover 70% of the UK population.
A serious problem for the companies concerned is the immense start up costs of £200m.
Pearson is a favourite but Granada and BSkyB are serious contenders and just as powerful in terms of programming and experience. If successful BSkyB and Granada would be restricted to a minority share due to their already significant involvement in British commercial television. Although still not finalised Goldman Sachs, Polygram, Yorkshire and TCI are all involved in the Granada/BSkyB consortium. Analysts believe that to recoup the initial start up costs will take about five to six years and if the channel loses money, the ITC may be forced to relax programming rules.
Whoever wins the licence will be responsible for retuning millions of video recorders due to the interference caused by the Channel 5 signal. This could cost in the region of £50m to £100m and is included in the start up figure.
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