The British government has rejected Channel 4’s bid to sever its financial link with the ITV web.
Currently, the minority web C4 is effectively forced to subsidize its big brother ITV, thanks to a complex mechanism that was initially supposed to protect C4.
In 1993, the channel paid L38 million ($60 million) to the ITV companies, and the 1994 figure will be nearer L50 million ($78 million).
This is because C4 has been far more profitable than expected when it was given responsibility for selling its own advertising in 1993.
Previously the web’s airtime sales had been handled on its behalf by the ITV companies, and it was feared that when C4 went head to head against the far more commercial ITV, the minority-interest web would suffer.
In order to protect C4’s remit to cater for minority audiences, the government drew up legislation requiring the ITV companies to bale out the channel if its share of advertising fell below 14%. In return, ITV was guaranteed a slice of C4’s profits if its share topped 17%.
When this turned out to be the ease, C4 bosses launched a campaign to get the money back, arguing that it was ridiculous for money that could be spent on programming to disappear into the pockets of the ITV fat cats. In response, ITV chiefs claimed that the money was essential to protect their regional output.
National Heritage Secretary Stephen Dorrell has told C4 execs there was not a strong enough case for a change in legislation before a ’97 review.