TV Companies Ownership

Sky

British Sky Broadcasting (better known as SKY TV or BSkyB), was formed in October 1990 specialises in telecommunications and media industry. The company was formed when Sky television and British Satellite Broadcasting, who were both struggling financially, merged to become BSkyB (Sky) and now has over 10 million subscribers.

Sky is listed on the London Stock Exchange with News Corporation owning a controlling 39.1% of the company.  In 2010, News Corporation launched a takeover bid but withdrew the bid in July 2011 because of The News of the World’s alleged phone hacking scandal, causing the newspaper to be shut down. ITV has been the subject of a flurry of rumoured take-over and merger bids since it was formed. For example, on 9^th November 2006, News International announced that it had approached ITV about a proposed merger. The merger was effectively blocked by BSkyB on 17^th November 2006 when it controversially bought a 17.9% stake in ITV for £940 million. The plan would see News International Group acquiring Sky’s stake in ITV plc in exchange for Sky taking full control of Channel 5. However, no move materialised and News International Group sold Channel 5 to Richard Desmond's Northern & Shell in July 2010.

Sky has had a lot of criticism of how it influences TV and how they make more money.  On 12th July 2011, former British Prime Minister, Gordon Brown claimed that Sky’s majority owner, News Corporation attempted to affect government policy with regards to the BBC in pursuit of their own commercial interests (i.e. BSkyB). He went further, in a speech in Parliament on 13th July 2011, stating:"Mr. James Murdoch, which included his cold assertion that profit not standards was what mattered in the media, underpinned an ever more aggressive News International and BSkyB agenda under his and Mrs. Brooks’ leadership that was brutal in its simplicity. Their aim was to cut the BBC license fee, to force BBC online to charge for its content, for the BBC to sell off its commercial activities, to open up more national sporting events to bids from BSkyB and move them away from the BBC, to open up the cable and satellite infrastructure market, and to reduce the power of their regulator, OFCOM. I rejected those policies." Also a lot of people aren’t happy that when you by a Sky box, you have to buy Sky Sports and Sky News in a way of Sky getting more money. Even if you have Sky Sports and Sky Movies, you might still have to pay to watch live boxing and the latest movies on Sky Box Office which is overpriced in my opinion. They also get a lot of money through companies and business’ wanting to advertise on Sky and wanting to sponsor some of their programmes.  Also a TV license costs £145.50 and they have over 10 million subscribers and their tax bill equals to 7% of their revenue, so a lot of money is coming in and not a lot going out which is key factor in their success.

BBC

British Broadcasting Company (BBC) is probably the biggest cross-media companies in Britain. Founded on New Year’s Day 1927, ever since then the BBC has gradually got bigger every year until they are as big as they are today. Currently owned by Lord Patten of Barnes (Chairman) and Mark Thompson (Director-General).  The BBC is funded differently to other media companies. They get their money through the TV licence. For their TV channels they get £7.96 per month per household, for their radio stations they get £2.11 per month per household, for their online services they get £0.66 per month per household and for other costs they get £1.40 per month per household. Another way they get funding is when a programme like Strictly Come Dancing, where the viewing public pay to ring in vote for their favourite acts, the BBC earn lots of money from these phone in shows and if you want to ring Radio 1 to ask them to play a song there is a fee you have to pay to phone or text in.

One of the BBC’s main selling points is that they are very diverse with their numerous TV programmes. BBC One is quite adult contemporary as they quite often record shows like The News, Eggheads, Bargain Hunt e.t.c. BBC Two is also adult contemporary as record shows like Coast and Weakest Link however they record shows like Mock the Week and Match of the Day 2 which swings the target audience towards male’s over 25. BBC Three is aimed at 16-34 year olds and mainly specialise in comedy programmes e.g. Family Guy, Little Britain, Gavin and Stacey, Two Pints of Lager and a Packet of Crisps e.t.c. They also often air live music from festivals e.g. Glastonbury and Radio 1’s Big Weekend.  BBC Four is also adult contemporary as it shows a lot of history documentaries, live performances of classical music like BBC Proms and a lot of animal documentaries e.g. Life and Blue Planet.

There has been a bit of controversy within the BBC for many reasons. Firstly there is the licence fee which some people think is overpriced. However I wouldn’t mind paying that much because it means the BBC can make better quality programmes because they will have a bigger budget and it means there are no adverts during shows. However there are some negatives, people with lower incomes pay more for their licence fee because they can’t pay it all at once they charged more for delay of payment and get charged and extra fee for paying on their credit card because they can’t afford any other type of payment. Also now because a lot of channels have an online player and very little adverts are played on the online channels so people are paying licence fee to have no adverts when the likes of ITV have an online service which has little adverts shown. Secondly there was a big deal over political correctness within the BBC so throughout all their programmes from Question Time to Match of the Day; they can’t be biased to one person or team or group e.t.c.  The BBC also can’t advertise because of the licence fee. The reason is that it is a public service broadcaster and not a commercial broadcaster so the public don’t want to be paying their hard earned money for a load of adverts.

Film Ownership

20^th Century Fox

20th Century Fox are a subsidiary company of multinational media conglomerate News Corporation. In the early days, Fox were struggling financially and had to sell parts of their headquarters and fire a few actors/actress’ including the likes of Marilyn Monroe to keep them afloat. They also had to rush film productions to get the filming done in the time limit without having to pay more to spend a few extra days filming. However as a last ditch plan to earn some money they made a big budget film called The Longest Day and was recognised as one the best World War II films of all time. From that money they created various Box Office hits including, the original Planet of the Apes, Sound of Music and of course Star Wars. From these profit making films, the chairman of Fox, Dennis Stanfill, invested in other ways to make money including, resort properties, soft drink bottles and Australian theatres in order to make more money. In 1935 20^th Century merged with fox to become 20^th Century Fox and started trading business together ever since

Film Financing

There are many ways for film companies to get the proper finances for their film. One way film companies get extra funding is called product placement where for example, in the James Bond films, he always drives an Aston Martin, so Aston Martin pays the film producers to use their cars in the James Bond films. Another way to get film financing is Government Grants, this is when a number of governments run programs to subsidise the cost of producing films. Governments are willing to provide these subsidies as they hope it will attract creative individuals to their territory and increase employment. Also, a film shot in a particular location can have the benefit of advertising that location to an international audience. Government subsidies are often pure grants, where the government expects no financial return. Another way of film financing is tax schemes. A number of countries have introduced tax legislation that has the effect of generating tax deductions for producers or owners of films. Schemes are created which effectively sell the tax deductions to wealthy individuals with large tax liabilities. The individuals pay the producer a fee in order to obtain the tax deductions. The individual will often become the legal owner of the film or certain rights relating to the film, but the producer will in substance continue as the real owner of the economic rights to exploit the film. However governments are beginning to recognise that tax deductions are an inefficient way of supporting the film industry. Too much of the tax benefit is siphoned off by promoters of the tax scheme. Also, films with little commercial or artistic merit are produced simply to generate tax deductions. In 2007 the United Kingdom government introduced the Producer's Tax Credit which results in a direct cash subsidy from the treasury to the film producer. Another example of film financing is private equity financing. Generally tax-advantaged film and television investment for individuals comes with little risk. Most often, the cost of production is recouped by a combination of federal and state tax incentives, thereby eliminating most of the risk. The main source of film financing is debt finance. There are four different ways of financing; Pre-sales, TV-presales, negative pickup deal and gap/supergap financing. Firstly pre-sales is based on the script and cast, selling the right to distribute a film in different territories before the film is completed. Once the deal is made, the distributor will insist the producers deliver on certain elements of content and cast, if a material alteration is made, financing may collapse. In order to gain the “big names” essential for drawing in an international audience, distributors and sale agents will often make casting suggestions. Pre-sales contracts with big name actors or directors will often have an "essential element" clause that allows the buyer to get out of the contract if the star or director falls out of the picture. The reliance on pre-sales explains the film industry's dependence on movie stars, directors or certain film genres. Upon signing a pre-sale contract, the buyer will pay a 20% deposit to the film's collection account, with the balance due upon the film's delivery to the foreign sales agent. Usually a producer pre-sells foreign windows/rights so that the producer can use the value of those contracts as a part for the production loan that is provided to finance the production. Secondly, TV pre-sales is more usual for a producer to sell the TV rights of a film after it has been made, it is sometimes possible to sell the rights in advance and use the money to pay for the production. In some cases the television station will be a subsidiary of the movie studio's parent company. A negative pickup deal is a contract entered into by an independent producer and a movie studio wherein the studio agrees to purchase the movie from the producer at a given date and for a fixed sum. Until then, the financing is up to the producer, who must pay any additional costs if the film goes over-budget. Superman and Never Say Never Again are examples of negative pickups. Finally, gap/supergap financing is a form of debt financing where the producer wishes to complete their film finance package by procuring a loan that is secured against the film's unsold territories and rights. Most gap financiers will only lend against the value of unsold foreign rights, as domestic rights are seen as a performance risk, as opposed to more quantifiable risk that is the foreign market. This means that the foreign value of a film can be ascertained by a foreign sales company by evaluating the blended value of the quality of the script, its genre, cast, director, producer, as well as whether it has theatrical distribution from a major film studio all of this is taken into consideration.