UKTV and Channel 4 close to £1bn resolution

UKTV and Channel 4 are understood to have resolved the bulk of the issues surrounding UKTV's £1bn 10-year ad sales contract, after calling in the lawyers to "iron out" aspects of the deal.

Andy Barnes: Channel 4 seeks strong replacement for former sales director
Andy Barnes: Channel 4 seeks strong replacement for former sales director

It emerged in March that UKTV and Channel 4 were locked into discussions over the contract, which was signed last year and includes the ad sales for UKTV’s 10 linear channels, its video-on-demand services, and its websites.

However, a senior source dismissed speculation that Channel 4 had been forced to subsidise the contract with ad revenue from its own channels, claiming the contract was linked to UKTV’s audience growth and Channel 4’s ability to sell against it.

At the presentation of Channel 4's annual report last month chief executive David Abraham said Channel 4’s ad revenue was "tracking around flat", putting it below the market, although if UKTV was included, the broadcaster had double digit growth.

Channel 4 is said to have suffered during the TV trading season in autumn 2010, following the departure of key trader Matt Shreeve, and bullish performances from Sky – with the addition of the former Virgin Media Television channels – and ITV.

Channel 4 is currently on the hunt for a new sales director, as former incumbent  Andy Barnes stepped down from the board at the end of March. Barnes will continue to work with the broadcaster as a consultant.

While Channel 4 needs to secure a strong replacement for Barnes, the role is highly sought after and it is believed that the headhunter is due shortly to provide Channel 4 with a shortlist of candidates to take through to the next stage.

Channel 4 and UKTV declined to comment.