ITV franchise trio kicks off battle over programme costs

The move puts the three ITV franchise holders on a collision course with ITV executive chairman Michael Grade, who said earlier this month that the broadcaster was subsidising the regional companies. All three have since countered that they are actually paying too much for content.

Between them, UTV and SMG contribute 9% of ITV's annual programme budget. Channel TV would not reveal how much it pays but Grade has called on the broadcasters to increase their collective contribution by£25m, given they reach nearly 11% of the UK population. However, the trio of channels believe ITV has overlooked more than£75m worth of benefits that it gets from being part of the wider network, such as cross-promotion of channels, access to spectrum and contributions towards spin-off development costs.

They also argue that they should be paying acquisition rather than co-production rates for ITV programmes, given that they do not have an equal say in what is commissioned.

The broadcasters are planning to jointly appoint a consultancy to calculate the market price for the content and will then use it to petition Ofcom for a rule change.

UTV managing director Michael Wilson told Broadcast: “Michael Grade's comments have come without consultation. We want a system that is fair and equitable so that if we all put money into the pot, we all get a say in programmes.”

ITV's programming choices do not reflect the lives of UTV's target audience, Wilson added. “Even the title of programmes like Britain's Got Talent exclude Northern Ireland. If you're sitting in Northern Ireland, you get a bit pissed off. Why didn't ITV bid for Irish football rights as well as English football rights?”

SMG would not comment until its interim results are released on Thursday (28 August). A Channel TV spokesperson said Grade's valuation of the “subsidy” “offered an inaccurately self-serving view of how the network actually works”.

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