ITV's Michael Grade calls for regulation cut

Broadcaster may be forced to scrap its news service

LONDON -- ITV executive chairman Michael Grade has added his voice to a building chorus ahead of next week's Ofcom review of public service broadcasting, making a last-minute plea to be cut free from regulatory burdens he claims will cost his network 100 million pounds ($146 million) over the next five years.

Without "radical action," Grade says that ITV is heading toward a situation "where commercial investment in original programming in the U.K. becomes unsustainable."

Writing in the Daily Telegraph, Grade warned that ITV's news output and high-end dramas will be at risk if it is not allowed more commercial and regulatory freedom.

Grade said that the commercial broadcaster must be freed from regional production quotas and rules demanding it commission no less than 25% of its programming from the indie production sector. The broadcaster also wants to operate a joint-venture regional news partnership with the BBC, instead of bearing the investment costs alone.

"For some time, the gap between the costs and benefits of the public service licenses has been narrowing," Grade wrote. "By the end of this year, the costs of the licenses will outweigh the benefits. By 2014 the gap will grow to over 100 million pounds ($146 million)."

Grade said that ITV is "struggling" to maintain the $1.46 billion annual program investment it makes in such shows as the recent hit "Above Suspicion," with dramas costing about $1.46 million an episode to make and big entertainment formats such as "X-Factor" costing more than $700,000 per episode to make.

He reiterated his warning that, without change, ITV could be forced to abandon its public service commitments altogether.

"There is another option," he said. "ITV could give up its public service licenses and operate as a purely commercial entity, with no commitment to news or original production. That is not without risk and is not our preferred option."

Grade's comments come a day after BBC director general Mark Thompson called for ITV's regulatory burdens to be slashed and backed the idea of a merger between government-owned Channel 4 and RTL-owned Five.