NEWS: Govt to amend Broadcasting Bill to stop warehousing

The Government is proposing an amendment to the Broadcasting Bill that will ensure media owners cannot abuse ownership regulations by ‘warehousing’ some of their interests.

The Government is proposing an amendment to the Broadcasting Bill that

will ensure media owners cannot abuse ownership regulations by

‘warehousing’ some of their interests.



The amendment follows pressure from industry bodies such as the

Independent Television Commission and the Radio Authority for the

Government to clamp down on attempts to get around the ownership rules.



Warehousing is used by media owners in order to hold stakes in other

media companies above the accepted level. The warehousing system, which

was recently used by Granada Television so that it could take a 20 per

cent stake in Yorkshire Tyne-Tees, involves putting these interests into

shell holding companies, which are usually equally owned by two

protagonists. The media owners can then claim that they do not actually

control the shares.



The Department of National Heritage has recognised concerns that the

Broadcasting Bill ‘will not, as currently formulated, catch some of the

arrangements that have already been used to circumvent the ownership

rules’.



Virginia Bottomley, the Secretary of State for Heritage, is now

introducing amendments that are ‘designed to strengthen the definition

of control and to ensure that it is sufficiently robust’.



As well as proposing more flexibility in the definition of control, the

amendments aim to introduce a new system of aggregating the share of the

TV audience that a company controls.



The Broadcasting Bill currently restricts companies to a 15 per cent

share of the total TV audience. Where media owners control an ITV

licence, 100 per cent of that licence’s audience share is attributed to

the media owner. Under the new amendment, if the media owner has a

further 15 per cent stake in another Channel 3 licence, then half of the

licence’s audience share is added to the total.



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