Sky to cut BBC transmission charges by over £5m a year

[bassethound]

Sky has today announced plans to cut the amount it charges the BBC to transmit TV and radio networks by more than £5m a year, in a move that is expected to benefit BBC local radio services.

Last October, the BBC said that it would be able to save £50m over five years if Sky completely waived the cost of carrying BBC services on its platform, enabling the corporation to reverse some cuts in the Delivering Quality First austerity plan.

However, Sky said at the time that it would not provide the BBC with a "multi-million pound subsidy" that would be paid for "ultimately by Sky customers who've already paid the licence fee".

However, the satellite broadcaster now appears to have relented slightly on the issue, saying that it will slash transmission costs for all channels on its platform by more than 50% by 2014.

The BBC is expected to be the biggest beneficiary of the change, as it has nearly 50 TV and radio channels on Sky, bringing an estimated saving of £5.5m a year.

John Tate, the BBC's director of policy and strategy, has said that the majority of savings would go towards reducing the around £10 a year in cuts proposed to the corporation's local radio services.

Sky has previously justified the fees it charges, which are overseen by media watchdog Ofcom, by arguing that it had to recoup the £1bn cost of investing in its satellite TV platform.

In a statement today, the firm said that it has published a new rate card which brings "a reduction in platform contribution charges for more than a hundred channels on the Sky platform, including all public service broadcasters".

It also said that the transmission charges have reduced over time "as the costs of developing the platform have increasingly been recouped".

According to calculations by The Guardian, the BBC will see its Sky transmission cuts reduced from £9.9m a year to £4.4m. ITV's charges will fall from £8.1m to £3.1m, Channel 4 will see its fees slashed from £5m to £2.7m, and Channel 5's costs will drop from £1.4m to £800,000.

However, the public service broadcasters had previously argued that Sky should actually pay them for the privilege of carrying their channels, as they are the most popular on its pay-TV platform.

Pointing to international comparisons, particularly in the US, the broadcasters claimed that Sky should pay out as much as £120m in fees to offer the channels to satellite TV customers.