Breakfast TV station, GMTV, is to see a significant reduction in the fee it pays to the Treasury each year in return for its ITV licence. The station, which is believed to be losing around £15 million a year, will pay a proposed tender of £20 million from January 1999; its Treasury payment last year was over £50 million.
This reduction is significant for GMTV as two of its shareholders, Scottish Media Group and Guardian Media Group, have said that they are to reconsider their stakes in GMTV in the light of the new licence fee payments (see ITV Companies May See Licence Payment Reductions From ITC). The new, smaller fee should allow the station to become profitable and the shareholders are expected to accept the terms.
The changes come after the Independent Television Commission (ITC) has reassessed the way ITV companies pay for their licences in the light of increased commercial competition from cable and satellite channels.
Under the new system, most of the money which the ITV companies pay to the Government will come from the percentage of qualifying revenue (PQR). This is a percentage of the revenue gained by each broadcaster through advertising and sponsorship.
Eleven of the sixteen ITV licensees requested earlier in the year to renew their licences at the beginning of 1999. These are: Anglia, Border, Carlton, Central, GMTV, HTV, Meridian, Tyne Tees, Ulster, Westcountry and Yorkshire. These franchises will now tell the ITC whether they accept the terms. The remaining licence-holders, and those which do not except the terms, can reapply some time in the next three years.
In making the changes for these eleven groups, the overall reduction in payments is £71 million. Not all the franchises will see reductions in their payment; Central’s fee, for example, increases from around £31 million to £49 million under the new system.
Sir Robin Biggam, the ITC’s chairman, said: “Our intention when setting financial terms was to ensure these licensees would be able to continue to provide the range and quality of programmes – on a national and regional basis – for which they are justly renowned, whilst providing a fair return to the Exchequer for the right to broadcast to nearly every home in the UK.”
Independent Television Commission: 0171 255 3000
