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
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.