Channel 4’s Proposed Share In BBC Worldwide Is Dismissed

Ofcom has dismissed the idea of giving Channel 4 a stake in BBC Worldwide as a way of plugging its funding shortfall, according to a leaked draft of its phase two public service broadcasting review.

The industry regulator is thought to have said in its recommendations that giving Channel 4 a share of the BBC’s commercial arm would be “a too complicated method of achieving this goal,” according to a report in the Guardian.

The document suggested there were a number of practical issues involved in an acquisition of BBC Worldwide by Channel 4, including rights, finance and tax obstacles, all of which could raise significant legal problems.

Ofcom said: “For these reasons, we do not believe that acquisition of Worldwide by Channel 4 is an appropriate or achievable solution to the deficit in funding for public service content.”

BBC Worldwide is currently estimated to be worth between £1.2 billion and £1.8 billion.

In the draft, Ofcom said transferring BBC assets to other providers would only be a fourth option of sourcing new PSB funding.

Channel 4 asked for a share of public money after it announced in April an operating loss in 2007, with its chairman Luke Johnson warning at the time that the broadcaster had reached a “tipping point” in its funding gap (see Channel 4 Suffers First Operating Loss Since 1992).

Channel 4 claimed it needed £100 million but Ofcom says it will only need around £40 million in the medium term.

Recent reports suggest that Ofcom will recommend that the BBC give its excess licence fee money to Channel 4 to support its public service broadcasting role (see ITV Set To Reduce Public Service Role).

The second consultation of Ofcom’s PSB review is expected to officially published in September this year.

Ofcom: 020 7981 3040 www.ofcom.org.uk Channel Four: 020 7396 4444 www.channel4.com BBC: 020 8743 8000 www.bbc.co.uk

Ofcom: 020 7981 3040 www.ofcom.org.uk BBC: 020 8743 8000 www.bbc.co.uk