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Channel 5 pays pounds 88m for films

Channel 5, committed to screening a feature film every night, splashed out pounds 88m yesterday for two years' worth of Warner Brothers' forthcoming productions - almost as much as its entire first year programming budget.

ITV also went to the movies yesterday, beating off both C5 and the BBC to clinch a multi-million pound deal with Universal Studios, which has traditionally dealt with the BBC.

The contract - the first between ITV and Universal for eight years - gives Britain's biggest commercial network the right to premiere 32 future and current releases including Twister, Dante's Peak and Jim Carrey's Liar Liar on British terrestrial television two years from now.

In the meantime, it can screen former hits such as Back To The Future, Beethoven, Kindergarten Cop and Jaws.

ITV was also in the bidding for the Warner package, but walked away after forcing up the price for its new fledgling rival, whose entry into the programme acquisition market is causing galloping inflation in this sphere.

Channel 5's initial annual programme budget is only pounds 110m, but its management insisted yesterday the Warner deal would not detract from domestic programming. This could mean that its shareholders - Pearson, CLT and United News & Media - could have to inject more money into the company.

Dawn Airey, C5's director of programming, said: "This deal will give 5 many of the upcoming box office hits opening in the next two years, demonstrating its commitment to bringing viewers Hollywood's best."

Warner Brothers' president, Jeff Schlesinger, called it "an extraordinary deal", explaining: "Not only is it the largest single terrestrial transaction that Warner Bros has ever concluded in the British market, but more importantly, it is with a broadcaster that launched less than a week ago."

ITV has indicated that hit films remain important in its schedule and it will outbid new rival channels to secure them. "The real gainers will be the Hollywood studios. They have never had it so good," Mr Plantin said yesterday.

He added: "Competition is intense for top quality series. Securing the Universal deal tops up our war chest to 2000."

In November last year Channel 5 joined forces with BBC1 to buy 68 films from 20th Century Fox.