itvITV will transform its commercial relationship with STV and UTV after the broadcasters negotiated new Channel 3 networking arrangements.
The deals, which are subject to Ofcom approval, will see the Scottish and Northern Irish broadcasters become “affiliates” of the network, meaning they will pay an up-front fee for the rights to broadcast ITV content. Currently, the two licence holders pay a percentage of the Channel 3 network costs based on their share of qualifying revenue.
The new arrangements were described as “pay as you go” by on analyst, allowing STV and UTV to make payments for content at the point of broadcast, rather than contributing to programme costs ahead of the production process.
It means ITV will assume full responsibility for the costs of the network schedule and the fixed contributions it will receive from STV and UTV also cover digital rights, granting them permission to carry all ITV1 content on their VoD services.

Both STV and UTV declined to comment on how much they will pay to carry ITV programming, including The X Factor and Downton Abbey.
It brings to a close months of negotiations and, if approved, the refreshed arrangements will be put in place until the Channel 3 licence renewal at the end of 2014.
STV, which controls the Scottish TV and Grampian TV franchises in Scotland, will take the “majority” of the ITV1 programming as part of the agreement, but will continue to broadcast bespoke Scottish programming where appropriate.
An STV spokeswoman said it was: committed to ITV’s flagship drama”, but would not comment on whether it will reverse a decision to opt out of ITV1 Sunday night drama.
STV still owes ITV £10.8m as part of its legal settlement last year and the new arrangements mean it will pay this off in programming stock, as well as cash.
Rob Woodward, STV Chief Executive 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.

Under the agreement, UTV will secure distribution for UTV HD on Sky and Freesat, as well as Freeview following digital switchover. Furthermore, ITV will continue to handle UTV’s national advertising sales.
John McCann, UTV Chief Exec commented: 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, ITV chief executive Adam Crozier added: This agreement, which is still subject to regulatory approval, represents a major milestone for us as it consolidates and simplifies the ITV Network.

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By Expat