New ITV boss in £80m battle with Virgin

After just days in the job, Carolyn McCall could block ITV from 4m homes in row over fees

ITV boss Carolyn McCall is facing a battle with Virgin Media over an £80m bill for its main channel.

The commercial broadcaster wants Virgin to pay for ITV1, home of prime-time hits such as Dancing On Ice ( pictured), Victoria and The Voice, which it currently gets for free.

If the cable television firm refuses to pay up, ITV is understood to have threatened blackouts, meaning nearly 4m UK households that use Virgin Media could be unable to watch the channel.

The dispute is one of several conundrums former EasyJet chief executive McCall, 56, has inherited after taking the reins at ITV earlier this month.

She must also battle falling advertising revenues and competition from online rivals.

And in a fresh challenge to the chief executive just weeks into her appointment, Virgin entertainment boss David Bouchier warned that pulling ITV1 from his company’s television service amounted to ‘mutual self-destruction’.

He said: ‘ Our customers will not pay for a service that is available for free and we see no reason why they should.

‘The position was very clear. How ITV is funded has been the same since it was created – and to come and pick us off individually is not an appropriate way to do it.

‘The Government has also been clear that there are benefits on both sides to re-transmission, so for ITV to do something like that, I cannot see the logic, it is counterintuitive.

‘We are the second-biggest TV platform in the UK and that makes us an important partner. What is important is positive engagement, rather than this position of mutual self-destruction. I’m confident logic will prevail.’

Under laws passed in the early days of cable television, Virgin was allowed to carry ITV1 for free. But after years of lobbying by ITV and other public broadcasters, the Government last year scrapped the rule. It has left Virgin open to demands from ITV, which is understood to have handed it an £80m bill.

The cash boost it could provide is seen as a way for ITV to continue to reduce its reliance on advertising – currently responsible for about half of its revenues.

Last year analysts predicted it could extract £140m in total if both Virgin and Sky – the satellite broadcaster that is still exempt under separate laws – are made to pay up. But the providers say they already pay ITV for its other channels, such as ITV2, and argue they compensate it further by giving it top-billing on set-top box TV guides, as well as the highly prized ‘103’ channel.

Ministers, despite changing the law, have said it is a matter for the companies to settle themselves.

Yesterday an ITV spokesman insisted the current arrangement amounted to ‘a multi-millionpound annual subsidy’.

He added: ‘ ITV, and other public service broadcasters, should be paid fairly by pay-TV platforms that make money from our multi-billion-pound investment in original UK content.

‘A change in the law now allows us to negotiate with Virgin for payment for our main channel, and that is what we are attempting to do.’