C4 Funding Alterations Proposed By Government

In the week when Channel 4 has had to pay £74 million out to ITV companies, good news has come from the government. Lord Inglewood, broadcasting minister announced the government’s decision to cap the reserve fund designed as a safety net for C4, allowing the money to go instead into programming.

Currently, of any revenue C4 achieves above the 14% threshold, 50% is paid to the ITV companies. Of the remaining 50%, C4 gets to keep half for programming funds, and the rest goes into the reserve fund. It is this fund which the government has decided to cap. The Department of National Heritage told MediaTel that the government understands C4’s arguments, but that where it and the ITC differ from C4’s view is in C4’s demands for being no funding formula at all. The capping of the reserve fund is a speedy way of C4 to keep more money without harming the ITV companies.

The reserve fund currently stands at £70m; it is expected that from next year no further funds will be paid into the fund. Depending on revenue, C4 stands to gain at least £35m a year extra.