LONDON (Brand Republic) - The cost of ITV operating licences are expected to soar when the Independent Television Commission announces new cost calculations later this week.
Broadcasters are expected to face additional payments of yearly cash sums and a percentage of annual profits for the seven out of 14 regional ITV licences that are up for renewal. Analysts predict that ITV’s two largest broadcasters, Granada and Carlton Communications, will be charged with paying nearly double the current amount.
The Granada area franchise is expected to cost £8m a year plus 20% of annual revenues, compared with the £9m a year and 11% of revenues set in 1991.
Analysts also predict that the cost of Granada’s five licences will increase from £118m in 2000 to £211m this year. Carlton is expected to be charged £8m a year plus 17.5% in annual revenues, compared with the £2,000 a year and 11% in annual revenues it currently pays for the Central TV franchise.
Under the system, licence-holders are not allowed to appeal against the ITC’s decision, which is based on the commercial value of each franchise.
This week’s announcement heralds the end of a two-year renewals process that has already seen ITV’s other seven franchises re-awarded. Other licences to be recalculated are: Granada’s LWT; Scottish and Grampian, both owned by SMG; Channel Islands Communications’ Channel; and Capital Radio’s Border TV.