NEWS: ITV report sets out arguments against ending C4 formula

Channel 4 risks a shift towards a more commercial, ratings-driven programme schedule if the funding formula is abolished, the ITV companies warned this week.

Channel 4 risks a shift towards a more commercial, ratings-driven

programme schedule if the funding formula is abolished, the ITV

companies warned this week.



ITV set out its stall of arguments against scrapping the funding formula

- by which Channel 4 has so far paid ITV pounds 95 million - in a new

report on the background and significance of the payment mechanism.



The funding formula was introduced to protect the revenue base of both

stations when Channel 4 began to sell its own advertising airtime in

1992. It was deemed that Channel 4 would need 14 per cent of TV

advertising in order to meet the remit of its broadcasting licence. If

its revenue goes above 14 per cent, then a portion has to be paid back

to ITV.



But Channel 4 has consistently taken significantly more than 14 per

cent, and has been campaigning for the funding formula to be abolished.

It claims that if it were allowed to keep the money it would be able to

boost UK production and enable further investment in quality programming

to take place.



Leslie Hill, ITV’s chairman, questioned the assertions and claimed that

Channel 4’s campaign to scrap the funding formula ‘greatly

oversimplifies the real issues involved’.



The report states that Channel 4’s success in selling its own airtime

has meant that it has been able to increase its programming budgets by

44 per cent - more than any other broadcaster. If the formula were

scrapped, ITV said, Channel 4 would become more commercially led.



ITV is keen to set out its arguments in advance of the Government’s 1997

review of the formula.



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