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November 3, 2008

Michael Grade: ITV is not ‘threatening’ to give up PSB

By Paul McNally

ITV executive chairman Michael Grade has said he is confident that a solution to the broadcaster’s funding concerns will be found soon – and has dismissed claims the company is ‘threatening’to surrender its status as a public service broadcaster.

Speaking at a Broadcasting Press Guild lunch in London this afternoon, Grade said he was hopeful for a “reasonably speedy resolution” to Ofcom’s long-running review of public service broadcasting, and described reports that ITV could face fines of up to £80m a year if it hands back its PSB licence as ‘academic”.

“I still keep reading about ITV threatening to give up its PSB licence. We’re not threatening anybody,” he told reporters.

‘In the Ofcom paper, among their options was a future for ITV which did not include holding a PSB licence.

‘Ofcom has made huge strides over the past few years. I just want to get a quick resolution. All businesses need some kind of certainty.”

ITV has warned that the burden of providing public service output such as news, current affairs and documentaries is costing it £200m a year at a time when advertising revenues are suffering. The company estimates that the value derived from having PSB status is around £40m a year.

The media regulator is currently consulting on a number of possible models for the future funding of public service content. Among the proposals is a model where only the BBC and Channel 4 would provide PSB material – leaving ITV and Five free to focus on areas that are more commercially successful.

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But Grade said any decision by ITV to abandon its PSB status would be taken over time in full consultation with the regulator, and dismissed reports suggesting that ITV could be fined a percentage of its revenue under the Communications Act if it abandoned its public service requirements.

‘Since we’re in a debate with Ofcom I think it’s academic,’he said. ‘We’re in a debate with Ofcom. That’s very different to us saying we’ve had enough, here’s your licence back.

‘If it was up to me we will all go to a hotel somewhere, lock the doors and get it sorted in 24 hours. Unfortunately it doesn’t work that way.

‘I’m hoping that there will be progress on all-party support for the proposal, which will give us some certainty so that we won’t get blown off course by an election.”

The culture secretary, Andy Burnham, has pledged to look into the issue of public service broadcasting in the new year – shortly after Ofcom presents the findings of its review into how ITV, Channel 4 and Five will survive in a post-switchover environment.

Grade added that his three- to five-year turnaround plan for ITV, which was unveiled last summer, was ‘essentially on track”.

The former BBC chairman, who shocked the industry when he switched to ITV in 2006, said it was unlikely he would stay at the broadcaster beyond 2010, saying ‘four years is enough”.

He added: ‘I want to achieve a regulatory settlement. I want to get the turnaround plan moving then hand it over to somebody. I’m sure there’ll be a very strong field both internal and external.”

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