European commissision moves to block Channel 4 handout

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The Government’s proposed £14m handout to help Channel 4 in the digital switchover to fulfil its public service broadcasting (PSB) commitments could be banned by the European commission, reports Media Guardian.

European competition commissioner Neelie Kroes wrote a letter to foreign secretary David Miliband suggesting that Channel 4 had enough money to pay for the digital expansion itself, adding that the government admitted that C4’s cash reserves totalled £170m.

Her letter said: “The commission has doubts as to whether the financial support pledged for C4 is necessary and proportional.”

“The mere fact that the switchover may affect its profitability (but not viability) does not constitute a valid reason for claiming state funding.”

C4 recently announced 150 jobs will be axed as it plans cuts of £100m by the end of next year.

A C4 spokesman said: “The commission has stated its position and we are working with the government to demonstrate that that’s not a valid position.”

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