ITV licences set for revamp to even out Treasury payments

The Independent Television Commission is proposing an overhaul of the ITV licence system. It is hoping to achieve a more even distribution of the amount ITV companies pay the Treasury annually.

The Independent Television Commission is proposing an overhaul of

the ITV licence system. It is hoping to achieve a more even distribution

of the amount ITV companies pay the Treasury annually.



The ITC wants to abandon the competitive, blind auction system which

came out of the 1990 Broadcasting Act and, instead, base 75 per cent of

the annual amount paid by each station on advertising and sponsorship

revenue.



This would turn the current situation on its head.



Last year, ITV payments totalled pounds 412 million - pounds 257 million

coming from fixed fees and pounds 155 million from the revenue

percentage mechanism.



The proposals, contained in this week’s ITC consultation paper on

Channel 3 licence renewals, should be good news for those companies that

bid over the odds for their current licences, based on the 1993

agreement. These include Yorkshire Tyne Tees and HTV, now owned by

United News and Media.



However, the changes will also almost certainly hit those companies that

made minimal bids for licences. These include Central, now owned by

Carlton, and Scottish TV.



The ITC is not proposing any changes to the ITV map or the rules which

forbid any merger between the London weekday and weekend services,

Carlton and LWT.



The consultation document invites responses within two months, so a

final statement can be published by December. ITV companies can apply

for licence renewal for ten years from 1999.



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