Chris Smith, the Culture Secretary, today announced that the Channel 4 funding formula payments will end from 1999, saying that there was no “continuing need, or real justification” for the system to remain in place now that C4 is a “well-established broadcaster with a steady income stream.”
To cushion the financial blow to the ITV companies there will be a transitional year for 1998 where the payment to ITV will be cut from 50% to 33% before being phased out completely in 1999. At the moment, if C4’s income rises above 14% of Total National Advertising Revenue then 50% goes to the ITC to distribute to the ITV companies, with 25% going to a reserve fund and the other 25% being used to fund C4. On the other hand, if it falls below 14% then the ITV companies contribute funds to C4.
Mr Smith also said that C4’s licence should be reviewed to ensure that its income is used to create more new programmes and a more diverse schedule.
Department for Culture, Media and Sport: 0171 211 6200
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