Commercial TV Rivals Have Their Say Over BBC's Future

05 April 2004

Britain's BBC -- probably the world's most respected public service broadcaster -- has resigned itself to a place on the sidelines while its commercial competitors have their say as to its future. A situation, say some media observers, akin to inviting mice to ballot on the fate of the house cat.

The BBC's rivals have been invited by recently installed media and telecoms supra-regulator, Ofcom, to submit their views as to the future structure and funding of the BBC, whose Royal Charter expires in 2006.

ITV, the nation's largest commercial television network, is of the opinion that a percentage of the BBC's $2.7 billion ($4.99bn; €4.11bn) licence fee income should be "top-sliced" -- that is, offered to other broadcasters for the production of public service programming.

But the commercial giant also concedes that moving to a subscription-based BBC funding system is an "impractical" option -- thereby refuting the proposal put forward last month by the Conservative Party's review panel chaired by the former Channel 5 ceo David Elstein, famed for his S3 (sex, sleaze and sport) programming.

But there was near unanimity among the commercial companies on the issue of the BBC's governance, all rooting for the transfer of the BBC's oversight duties to Ofcom -- the body by which they themselves are regulated.

At present the BBC is answerable solely to its own board of governors which, although independent, is individually appointed by the government.

The sole dissenter is Channel 4, itself a publicly-owned but unsubsidized broadcaster, reliant wholly on advertising revenues. It is not opposed to the idea in principle but believes the timing to be wrong.

"Ofcom has got enough on its plate right now. The next public service broadcasting review, which takes place in five years' time, is when Ofcom should look at BBC regulation," opined a Channel 4 executive.

• Meantime, ITV's new management is busily drawing-up plans to feather its own nest, a move that does not delight the broadcaster's increasingly rebellious shareholder lobby.

Chief executive Charles Allen could gain £21 million over the next four years from three separate executive remuneration schemes now running at the newly merged broadcaster. In addition to an existing share-matching scheme agreed prior to February's melding of ITV, Allen is also entitled to a further share option scheme worth more than £1m at present share prices.

Corporate governance lobby group PIRC (Pensions Investments Research Consultants) is to lobby against the one part of the tripartite package yet to be agreed. PIRC's David Somerlinck believes the existing share matching schemes are overly generous, given the low performance standards necessary to trigger the payments.

The body has explained its position to ITV and awaits a response prior to the group's annual meeting later this month..

Data sourced from:; additional content by WARC staff