UK-licensed channels weigh Brexit impact

UK-licensed European channels face a period of uncertainty after last night’s Brexit vote, according to industry sources.

Hundreds of networks within the European Union are licensed out of the UK by communications regulator Ofcom.

With UK voters opting to leave the EU, the status of these licences, and how the channels will ensure they are valid in member states, remains unclear.

Member states are required to recognise the licences as the UK is a fellow member state, but as the country sets about withdrawing from the EU one source said the situation for channels was “confusion upon confusion”.

Ofcom said it licenses 1,100 channels in all, about 650 of which operate outside the UK.

A spokesman said the regulator could not comment on the status of these licences post-Brexit, adding: “We note the result of the EU referendum, and will now work to understand any implications for Ofcom. We will continue to regulate the communications sector under the existing frameworks until any changes are confirmed.”

There are various possibilities in terms of ensuring the UK-based channels can continue to operate, such as bilateral trade agreements, general agreements on trade services (GATs), which are operated by the World Trade Organisation, or a Norwegian model whereby EEA membership gives access to the EU internal market.

Amid the uncertainty, one legal expert said a Council of Europe convention on Transfrontier Television could ensure channels can continue to operate in EU territories. Olswang partner John Enser said while the Council of Europe agreement is outdated, it should offer the the UK channels some guarantees regarding their transmission in Europe.

“It is similar to the original TV Without Frontiers directive, although is old fashioned in the sense it doesn’t cover on-demand services and may have different requirements on ad minutage,” Enser said. “But it does have the same broad principles, and the geographical reach is the same.”

The challenge for UK channels groups is likely to come from ensuring their staff can move quickly and easily throughout the EU.

“If groups doing the [channel] distribution deals are based in London and start to need work permits and visas to travel you could see groups start to relocate elsewhere,” Enser said.

Channels and industry groups, meanwhile, are weighing the consequence of the vote for their operations, and few were willing to comment publicly today.

Bertelsamann, parent to channel operator RTL and prodco FremantleMedia, was one that did react officially and said it regretted the Brexit vote. “As an international company with a strong presence in the UK as elsewhere, Britain’s impending exit from the EU raises political and economic uncertainties for us all,” Bertelsmann said.

“Irrespective of the Brexit decision, the UK, as our fourth-largest market, remains very important to us. Bertelsmann generates revenues of around €1.7 billion [US$1.8 billion] with 5,500 employees in the UK, and will continue to invest in its businesses there.”