Rival bidders for Birmingham’s local TV licence say it is now impossible to launch a quality television service before the government’s deadline, following the collapse of the company that won the bid almost two years ago.
City TV, the holder of the local TV licence for Birmingham, appointed administrators on Friday to try to find a buyer for the licence.
While rival local TV firms spy the opportunity to launch a service in the second largest city in the UK, a successful bidder must adhere to Ofcom’s licence rules, which includes launching by 3 November.
“Trying to launch something between now and November is impossible for any sort of quality product,” said Sir Michael Lyons, the chairman of YourTV.
“Lets not kid ourselves. There isn’t some sort of quick fix here. No takers can achieve that time scale.” YourTV, which has the licences for Manchester and Blackpool/Preston, was one of three unsuccessful bidders for the Birmingham TV licence.
“It is sad to see City TV go and we wish we had been given opportunity to work on this licence,” added Lyons.
Jamie Conway, the chief executive of Made TV, said that only a “half-arsed” service could be launched by November.
“We would go for it, but if Ofcom have to stick with that November deadline it will be a half-arsed service,” he said.
Conway also believes the original rejected bidders, which included Made TV, should be considered first.
“Ofcom should take into account those of us who have gone for it in the past,” he said.
“There was the research, investment, relationships with local people and 20 to 30 companies on board. If Ofcom decided to let someone else come in with a cheque book and ignore the rest of applicants, there is a principle of fairness.”
Administrator Duff & Phelps has given interested parties until 25 August to make submissions for the Birmingham TV licence.
An Ofcom spokesman said: “Ofcom awarded the local TV licence for Birmingham to BLTV in November 2012. Following the announcement that the company has gone into administration, Ofcom has spoken to the administrator and explained that Ofcom’s consent is required for any licence transfer.”
Depending on the outcome of the auction, Ofcom may move to re-advertise the franchise.
However, as the launch deadline is a regulatory requirement of the licence, it is not clear how the time constraint issue will be resolved.
Conway believes it would take about five months to get a service running operationally, with March next year a realistic timescale for a full launch.
Lyons’ YourTV launched with a business plan requiring four licences – it currently has two – yet he indicated he would not be submitting an offer for Birmingham.
“The licence ought to be readvertised, rather than subject to a hole-and-corner deal,” said Lyons.
“Our focus is firmly on getting the Manchester and Blackpool/Preston channels up and running. It is a tough enough job without stretching ourselves further at this stage.”
An Ofcom spokesman said: “Ofcom must be satisfied that any new licensee has a sustainable business plan to run the Birmingham local TV channel. We would also look at the ability of any proposed new licence holder to launch the service by the 3 November deadline, which is a condition of the licence, and meet the programming commitments. If Ofcom believes that the proposed licensee does not meet these requirements, we may decide to re-advertise the licence.”
YourTV has been in talks with a range of potential investors to back its model.
Last August, Made TV, which has five licences, put out a memorandum to investors seeking £5m with the expectation of profitability in the second year.
“No one should underestimate how difficult it is proving to raise money for Local TV,” said Lyons.
“Except for London, none of the big licences have launched, everyone knew it would be difficult and so it has proved.”
© 2014 Guardian News and Media Limited.