ITV gets set for pounds 88m payout by Channel 4

Channel 4, the public service broadcaster, will write a cheque for pounds 88m payable to the ITV companies in three weeks' time, with Michael Green's Carlton Communications, the leading Channel 3 broadcaster, set to receive about pounds 28m.

The payments are due under the controversial Channel 4 funding formula, which obliges the fourth channel to pay any excess it earns from advertising revenues over and above 14 per cent of total qualifying revenue in the terrestrial television sector. Last year, pounds 74m was paid out by Channel 4.

Carlton's share, which relates to its Central and London weekday franchises, represents just under 10 per cent of estimated 1997 pre-tax profits, according to media analysts.

Lesser amounts are due to other ITV companies, depending in part on their share of national advertising revenues. HTV, for example, is in line to receive pounds 6.4m.

The Independent Television Commission, which adjudicates the payment, declined to comment last night. An announcement is expected within a few weeks. Channel 4 also declined to comment, saying it would await a formal announcement from the ITC.

The system was put in place to ensure that ITV companies were compensated for guaranteeing the viability of Channel 4 when the service was launched in 1982. Michael Grade, the chief executive of Channel 4, has led a vociferous campaign to abolish the funding formula, which he says reduces the channel's flexibility in planning for future programming.

The system is expected to be reformed in 1998, with payments reduced to zero. ITV companies have argued strenuously against the reforms.

Channel 4 insiders said last night the payments were "iniquitous" and again called on the Government to make a formal pledge to reduce the payments by 1998.

Critics of Channel 4 say the payments are necessary to ensure that the channel maintains its commitment to "alternative" programming. The commercial success of the channel has been helped by hit series imported from the US, which in turn have allowed it to bid even more for programmes. This year, the programme budget is set to rise by 17 per cent to pounds 320m, roughly on a par with BBC2.

Channel 5's chief executive, David Elstein, long a critic of Channel 4, said last night that the fourth channel should have its remit changed to ensure that it provided an alternative programming service to both ITV and the new Channel 5 service.

The phasing out of the funding formula is expected to coincide with a rebalancing of cash payments made by ITV companies to the Treasury, as part of their licence requirements. Companies which made high bids under the 1990 Broadcasting Act will be permitted to renegotiate the payments with the ITC.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea