Ofcom Warns of Channel 4 Cash Shortage

19 September 2008

LONDON: UK broadcaster Channel 4 – state owned but commercially funded – could by 2012 need an extra £100 million ($182m; €126m) of public funding to break-even, says Ed Richards, ceo of communications watchdog Ofcom.

The regulator had previously stated that the shortfall in funds by 2012 – when the channel's analogue signal will be switched off – would be between £30m and £40m, but that figure has now been revised to £60m-£100m.

The revision is attributed to declining ad revenues in the wake of the credit crunch, with Richards arguing that a new "funding mechanism" would be essential to avoid budget cuts “to the detriment of the public content that audiences tell us they value”.

He did not say, however, if any new funding would be set aside from the BBC's licence fee, and the shortfall total also does not include the £50m which Channel 4 has previously pledged to spend on its youth, regional and online output each year.

Ofcom will issue a further consultation report on public service broadcasting next week.

It may offer short-term financial assistance to ITV, the UK's largest, and beleaguered, commercial broadcaster, with the possibility of lifting the channel's public service broadcasting requirement by 2014.

Data sourced from Telegraph.co.uk; additional content by WARC staff