ITV Broadcasters Set to Save £85m from Digital Move

20 March 2001

Media groups broadcasting via UK commercial television network ITV will pay about £85 million less to the Treasury in 2002 due to the launch of their digital satellite service, estimates industry watchdog the Independent Television Commission.

ITV broadcasters have already seen the amount they pay to the Treasury for a licence to broadcast fall from £360m in 1999 to a forecast £335m this year. This figure is set to drop to £250m in 2002, largely because the government – in a bid to encourage the move from analogue TV – has waived tax on ad revenue for homes receiving ITV digitally. Larger ITV companies such as Granada Group and Carlton Communications are expected to save around £10m in tax for every 10% rise in the number of digital homes.

The ITC made the prediction as it announced how much it will charge for the seven 10-year ITV regional licences which have yet to be renewed. This payment is broken down into two parts: one-quarter comes from a cash sum; while the rest is calculated as a percentage of ad revenue.

The watchdog will charge Granada £4.1m (down from £11m) for its Northwest licence, plus 15% of ad revenue (up from 11%). London Weekend also sees a drop in its cash payment from £9m to £4.9m, as well as a rise in the advertising percentage from 11% to 17%. Scottish Media Group will pay £1.7m (up from £200,000) and 11% (up from 2%).

News source: The Times (London)