Ofcom Releases C4 Review

LONDON, April 4: According to a new report from British
media regulator Ofcom, Channel 4 will likely be making a loss after 2010, “even
after taking advantage of cost-saving measures and the contribution from its
other commercial ventures.”

In the fall of last year, Ofcom commissioned LEK Consulting
to carry out an independent assessment of Channel 4’ s financial and operating
performance. The report cites a “wide degree of uncertainty” about Channel 4’s
financial performance beyond 2009, with losses likely beyond 2010, as well as a
strong likelihood that the broadcaster’s commercial performance will worsen in
the near- and medium term. Ofcom notes that the channel’s cash reserves may be
sufficient to cover its losses until 2012. In addition, the review says,
“Channel 4 will increasingly be forced to decide between different types of
investments that, on the one hand, support the group’s long-term commercial
health and, on the other, ensure the continued delivery of public-service
content.”

Ofcom has presented four options as possible responses to
LEK’s analysis: ruling out any further public support for Channel 4; monitoring
the financial performance and considering the case for intervention at a later
date; considering “safety net” measures; or moving immediately to assess the
possibility of “major intervention.”

Ofcom is seeking input on those four options. The deadline
for submissions in May 4.