Channel 4 may not receive public funds

It seems that Channel 4’s hopes of claiming government subsidy of £150 million slipping away. The European Commission has so that it wishes to investigate if assistance already in place breaches European rules regarding state aid.

Channel 4 is set to receive £14 million as part of dispersements from the BBC license fee. This amount is supposed to help offset costs bowl with digital switchover. But now European officials are saying that they have “serious doubts” that this will be permitted.

The Commission’s officials say that it is unclear if the proposed payments are what it calls, “necessary and proportional”. They believe that Channel 4 is being ‘overcompensated’ as it is a profitable company with access of £180 million in available funds.

4 has been rooting for additional financial help for several years, with the argument that as a state-owned “public service broadcaster” and as such should continue to receive additional funds that would be equivalent to free analogue spectrum payments that it currently receives.

In March the company so that in order to continue to produce “challenging, provocative and sometimes controversial programmes”. It would need to be subsidised, as the revenue it receives from selling advertising does not meet the annual costs program production, which run at £500 million.

They subsidy they estimate would need to be in the order of £150 million per annum as well as the £14 million already available.

A spokesman for Channel 4 says that they “always recognised the Commission might demand an enquiry, as their statement makes clear, this is a specific proposal to examine the Government’s plan to fund Channel 4’s switchover costs and they do not oppose state funding for broadcasters in principle.”

Channel 4 will need to prove that it has no other options but to take a public subsidy in order to continue production, it would then be in a position to apply for public funds.