James Delahunty
3 Apr 2008 19:27
The European Commission is to probe a state grant to Channel 4 in the United Kingdom. An assessment will be made on whether the grant distorts competition in the UK TV market. While Channel 4 does not receive public funding, it will receive a £14 million grant to aid its transition to all-digital broadcasting.
However, a commercial rival has complained that Channel 4 does not need to receive tax payers month, since it had sufficient cash to meet the capital costs. Channel 4 is a public service broadcaster, and so needs to be able to transmit its high quality material as such. This is how the hand-out has been justified.
"The information provided so far by the UK does not enable the commission to assess whether, given the costs of its digital switchover obligations and taking into account its commercial revenues, Channel 4 will have in the short term a net public service cost which would allow it to receive state aid," the EC said today.
The corporation ended 2005 with an annual profit of £99 million on sales of £894 million.