View from City Road: Sound and fury over Channel 4

Few people are more effective at creating sound and fury than Channel 4's chief executive, Michael Grade. Doubtless Peter Brooke, the Heritage Secretary, was subjected to more than a little of it at yesterday's meeting between the two to discuss the funding link between C4 and the ITV companies.

This arrangement, which Mr Grade passionately wants rewritten, stems from the 1990 Broadcasting Act and the new-look franchise round. Under it C4 was allowed to sell its own advertising, until then the preserve of the ITV companies.

But a 'safety net' was put in place under which the ITV companies promised to support C4 financially if it ran into difficulties, in exchange for which C4 would give them half of any income it earned over 14 per cent of net terrestrial revenues.

Since C4 advertising has been a runaway success, this has turned out to be a nice little earner for the 14 ITV companies - pounds 38.2m last year, probably pounds 50m this year. The provision has proved a source of considerable irritation to Mr Grade and his colleagues, who think longingly of the programmes they could make with all that cash.

With such a lot of money at stake, especially for the likes of HTV, Scottish and Yorkshire Tyne-Tees, television share prices might have been expected to take a battering. The fact that they have not is a clear sign that the market takes a pretty dismissive view of the likelihood that C4's lobbying will succeed.

Out of earshot of the volatile Mr Grade, the Department of National Heritage has made it clear it thinks C4 is being 'premature'. This is not simply because changing the rules at this point would mean reneging on promises made to the ITV companies at the time they bid for their franchises. It is also because an earlier move would mean primary legislation.

Things can change rapidly in this industry, and though Mr Grade is making hay at the moment it may not always be so. As one ITV executive remarked recently, Mr Grade gives every impression of behaving like a householder who wants to tear up his insurance policy just because his house hasn't burnt down yet.

One way or another, Mr Grade's campaign looks destined to turn out a case of much sound and fury signifying nothing.