Ministers Refuse To Bail Out ITV
Ministers have reportedly rejected requests from Carlton, Granada and other ITV companies to reduce their £300 million annual broadcast fees.
According to a report in today’s Times, the broadcasters have been lobbying the Government to link the annual payments to their advertising revenues, which have been sizeably diminished by the ongoing recession.
ITV’s current broadcast fee is a result of a Bill produced in 1996 which assumes an annual advertising growth of 3%. It is understood that ITV companies were hoping an amendment to this Bill would be included in the forthcoming Communications Bill.
The troubled commercial broadcaster is now pinning its hopes on the new super-regulator, Ofcom. It is hoping the body will re-examine the fee structure when the licences come up for renewal in about five years.
ITV has suffered from declines in both audience share and revenues over the last few months, and ITV companies, Carlton and Granada, are planning to merge to cut costs and improve their management structure (see Carlton And Granada Move Closer To £2.6bn Single ITV Company). However, the major regulatory stumbling block in the proposed deal is the creation of a single ITV sales, which has been frowned upon by many advertisers. Despite the inevitable backlash it is understood ITV is poised to take the idea of a joint sales house to the Office of Fair Trading (OFT) (see ITV Ready To Push For Single Sales House).
DCMS: 020 7211 6200 www.dcms.gov.uk ITV: 020 7843 8000 www.itv.com
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