STV, UTV and ITV agree new Channel 3 networking agreements

STV today announces it has reached a comprehensive agreement with ITV on new networking arrangements, through which STV will become an affiliate of the Channel 3 Network. The implementation of this new agreement is subject to regulatory approval and details of the new arrangements have been submitted to Ofcom. If approved, the settlement balance of £10.8m payable by STV to ITV plc over 18 months will be made from programme stock and cash.

STV is confident that the new arrangements will deliver sustainable cost-sharing arrangements for the Network and enable the continued delivery of high quality commercially sustainable public service broadcast services into the next licence period.

Rob Woodward, CEO of STV said: “Today's announcement confirms the stability and certainty of long term, commercially sustainable networking arrangements between the Channel 3 licence holders. STV remains 100% committed to its public service broadcasting credentials, to delivering a distinct schedule for Scotland and to providing a platform for informed debate. We are delighted to have reached agreement on a set of terms which will benefit our viewers and consumers across all distribution platforms.”

Adam Crozier, Chief Executive of ITV plc, said: "We look forward to continuing our positive relationship with STV under a new affiliate agreement.

"This agreement, which is still subject to regulatory approval, represents a major milestone for us as it consolidates and simplifies the ITV Network."

UTV Media plc is pleased to announce that its Television division, UTV Limited has signed new network arrangements for the provision of Channel 3 programmes and services with ITV plc, subject to regulatory approval.

The Network Affiliate Agreement (NAA) proposed by UTV and ITV plc to replace the current Networking Arrangements (NWA) would retain the essence of the NWA - a common coordinated pan-UK service capable of competing effectively with other national services - but has an updated structure which is consistent with the broadcasting, new media, technological and regulatory realities of Channel 3 today.

The new affiliate relationship between ITV plc and UTV would reflect the reality of ITV’s role and responsibility as the principal driving force behind the Channel 3 schedule in terms of funding, acquisition and scheduling of content. UTV, as an affiliate of ITV plc, would purchase programme rights to the network schedule for an agreed fixed fee at the commencement date of the NAA. ITV plc will assume full responsibility for the actual costs of the network schedule.

Further agreements in relation to the distribution of UTV channels on various platforms, new media programme rights, and a new national sales agreement with ITV plc have also been agreed, subject to the NAA receiving regulatory approval:

• A New Media Rights Agreement – grants UTV access to all ITV 1 programming for use on the UTV Player in Northern Ireland.

• An Operational Agreement – will ensure the distribution of UTV HD on Sky and freesat in Northern Ireland as well as the current service on Virgin and when digital switchover takes place in October 2012 on Freeview.

• A new Sales Agreement means ITV plc will continue to handle UTV’s national advertising sales.

If the new NAA is approved by Ofcom, these new agreements would run until the end of the current UTV licence in 2014 and any future licences awarded to UTV until 2024.

John McCann, Chief Executive of UTV, commented:

“We are delighted to agree new terms with ITV plc for the future provision of programming, transmission and sales services to UTV as the Channel 3 licence holder in Northern Ireland.

“The proposed new agreements retain the strength offered by the original Channel 3 regional partnerships in the ITV Network but provide the flexibility required for public service broadcasters to operate more effectively in today’s market on all platforms.

“UTV is totally committed to providing Northern Ireland with quality public service programming in the future as we have for more than 50 years.”

Adam Crozier, Chief Executive of ITV plc, said:

"We look forward to continuing our positive relationship with UTV under a new affiliate agreement. This agreement, which is still subject to regulatory approval, represents a major milestone for us as it consolidates and simplifies the ITV Network."

Michael Wilson, Managing Director, UTV Television said:

“UTV is by far the most watched channel in Northern Ireland, delivering the best of ITV network programming with high quality news, current affairs and diverse regional programmes which reflect a modern Northern Ireland which is core to the channel’s success.

“We are especially pleased to plan the launch of UTV HD on both Sky and DTT by the end of this year, to complement the existing UTV HD service available to Virgin customers in Northern Ireland.”

STV will become an affiliate of the Channel 3 Network and is confident it will continue a 'distinct' schedule for Scotland.

The new affiliate relationship between ITV plc and UTV would reflect the reality of ITV’s role and responsibility as the principal driving force behind the Channel 3 schedule in terms of funding, acquisition and scheduling of content. UTV, as an affiliate of ITV plc, would purchase programme rights to the network schedule for an agreed fixed fee at the commencement date of the NAA. ITV plc will assume full responsibility for the actual costs of the network schedule.
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I can't help thinking that this will put STV/UTV in a weak position if ITV ever decide to muscle in on their territory.

Reading the description on the BBC article it sounds a bit like the US network/affiliate system - ITV provide a network service and then STV and UTV take what they want from it.

In what way would ITV do that?

Relinquishing the C3 franchises and launching as a national channel ?