Agencies threaten TV Eye with OFT

Agencies are threatening to go to the Office of Fair Trading about the terms and conditions broadcasters are trying to impose on agency TV trading. The threats were made after an explosive meeting this week.

Agencies have claimed that through TV Eye, the broadcasters are imposing unfair financial burdens on them and that this has effectively created a cartel.

TV Eye comprises Carlton, Granada, Channel 4, Five and GMTV.

Andy Barnes, the chairman of TV Eye and the sales director of Channel 4, denied suggestions of a cartel. "At no point in time does TV Eye tell the broadcasters who they can or cannot trade with. It merely makes the recommendation you trade with agencies with certain levels of financial guarantee," he said.

The agencies met with the broadcasters earlier this week in a bid to resolve the ongoing dispute on the levels of bank guarantee the agencies have. TV Eye requires these guarantees in order to cover the cost of unpaid airtime in the event of an agency going bust.

The IPA, under its director-general Hamish Pringle, had come up with a solution where agencies could contribute to a bond, rather than pay for their own individual insurance, which would cover the costs if one of the members went bust with outstanding debts. However, it is understood that this idea is now unworkable.

It now seems that the agencies are being more bullish in their negotiations and that if an alternative resolution is not found before a meeting next week, then referral to the OFT is possible.

Despite this, one broadcaster said he felt the agencies were making empty threats. He added that it was unlikely agencies would refer the matter to the OFT because it may lead to their own books coming under scrutiny.

Barnes said discussions were ongoing and that a resolution needs to be made by 31 March.