The BBC have revealed a key source of their current financial problems, suggesting that they could save around £50m across five years if Sky hosted the public broadcaster’s channels on their satellite service for free.

Official research from the broadcaster claims that they pay almost £10m each year to the subscription TV giant, due mainly to ‘retransmission’ of their collective 49 TV and radio channels, especially when distributing to regional outlets. However, it is also believed that the high fee is also paid to reserve and maintain key channels in good (low) positions on Sky’s Electronic Programme Guide (EPG) (such as BBC One and BBC Two in slots 101 & 102 respectively).

John Tate, head of policy and strategy, who had recently praised Sky for their efforts in developing the UK TV industry, has noted that the government are looking at potential solutions on the ‘communications bill’, and that their fellow main terrestrial broadcasters (ITV, Channel 4, and Channel 5) are looking to join forces with the BBC in getting Sky’s retransmission fee either reduced or waived in their scenario.

Some experts have gone as far to claim that Sky should be paying these main channels for the right to host them considering their popularity with Sky’s 10m-strong customer base. Regardless of whether that claim is pushed on by the broadcasters, a fee withdrawal would not be the first time that Sky’s actions have saved the BBC some of their funds, after the pay-TV service bought a majority of the rights to air Formula 1 motor racing in July in an undisclosed (but likely to be very big-money) deal.

While Tate claimed that the BBC are ‘not looking’ to get paid themselves, he issued his belief that: ”In the context of a very tight licence fee settlement, payment from us to them of retransmission of what are to them highly valuable services is not appropriate.”

He added that the money saved from a potential 5-year fee waive from Sky would result in: “Not having to make reductions in output on local radio plus the reduction of BBC Four… it’s roughly £50m over the period.”

A Sky spokesman quickly hit back at the BBC’s formal request, suggesting that they should not be exempt from paying fees just because of the status they hold. The statement read: “The BBC chooses to buy platform services from Sky that enable it to provide a wide variety of services on the satellite platform. As with any broadcaster who uses our open platform, we ask for a fair and proportionate contribution towards its running costs. Of course if the BBC no longer wants to buy these services from us, it is free to stop doing so at any point. But these are legitimate operational costs, which are regulated by Ofcom, and all broadcasters who choose to use our platform pay them. We don’t see the BBC as being the exception to this principle. No-one expects the National Grid to provide the BBC with cheap electricity subsidised by its other customers, so why is Sky any different?”

While the two sides are probably due to be at odds over this issue for a little longer yet, what do you make of this situation? Are the BBC’s requests a fair one? Or will Sky’s ‘one size fits all’ fee regulations win through?

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