ITC gives ITV pounds 90m revenue boost

The Independent Television Commission wiped pounds 90 million off Treasury payments for eight of ITV’s 16 franchise holders this week.

The Independent Television Commission wiped pounds 90 million off

Treasury payments for eight of ITV’s 16 franchise holders this week.

The windfall will more than replace the estimated pounds 60 million

annual payment made to ITV by Channel 4 as part of the controversial

funding formula, which will be stopped at the end of this year.

The cashback stems from new licence terms offered to 11 companies

applying for licence renewal by the ITC. Six of the 11 companies have

already agreed to accept the new terms. Three companies have rejected

them and two have yet to make a decision.

The terms place much more emphasis on a percentage of advertising

revenue - rather than on an annual lump sum offered in the original bids

- for licence payment. This, according to analysts, would be a much

fairer system and allow more funds for investment in programming.

Of the big franchise owners, only United News & Media showed any serious

reservations about the new terms, describing them as ’at the low end of

expectations’. It accepted the deal offered for its HTV franchise holder

- providing estimated annual savings of pounds 16.5 million - but

rejected it for Anglia, which would only save pounds 500,000. It said a

decision would be made on Meridian by 11 December.

Border, whose fees rose under the new terms, declined to renew and will

reapply at a later date. Ulster has yet to make a decision.

In contrast, the ailing breakfast television licence holder, GMTV, was

particularly pleased with the new terms, which would save the company an

estimated pounds 31 million during 1999.

Granada Media Group, whose Yorkshire Television and Tyne Tees Television

franchises will save an estimated pounds 35 million a year between them,

was also delighted. ’This reduced level of payment reflects the

increasingly competitive TV market,’ Steve Morrison, Granada’s chief

executive, said.

Carlton accepted the terms offered on its London weekday franchise and

on Westcountry TV but not on Central, whose payments would rise under

the new system.


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