Potentially, Five could pay half as much to renew its licence in 2004 as it did last year.
The UK's fifth terrestrial broadcaster paid near to £24m for its licence in 2002 and, under the new terms, will pay an annual sum in 2004 of £4.4m, as well as a percentage of qualifying revenue, which includes advertising and sponsorship revenue.
At present Five, which is owned by RTL and United Business Media, pays a fixed annual cash sum based upon the amount it bid for the licence in 1995.
Based on the ITC's projections, over the 10-year licence period, approximately 75% of the new tender payments will be derived from the percentage of qualifying revenue and approximately 25% from the fixed cash sum. This means Five's payments will be similar to those of ITV's.
The ITC said the new structure was designed to introduce more flexibility as the majority of the tender payments will be derived from a percentage of advertising revenue earned by Five and is seen as more responsive.
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