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
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.