Other guidance for TV and radio broadcasters
There has been an increased level of interest in capital structures of certain infrastructure businesses, many of which tend to be subject to economic regulation. There are several reasons which explain this increased interest. First, in some regulated sectors, shareholders have made higher returns than assumed by regulators when setting regulated charges by making greater use of debt financing. Second, the choice of capital structure could reduce financial resilience, and we have seen a number of company failures in recent years (Monarch, Carillion).
We are seeing some regulators respond to these debates. Ofwat recently set out decisions on measures designed to ‘put the water sector back in balance’. These include a requirement on water companies with relatively high levels of debt to share with customers some of the benefits perceived to be accruing to equity investors.
The issues Ofwat’s decisions aim to address are of relevance to other regulated sectors. While in principle, capital structure choices are a matter for management, there are instances where these choices are relevant to policy-making. This brief statement sets out our views on these issues.
Ofcom regulatory statement on the position of TV channels and programmes that offer gambling services to viewers.
The regulation of transactional TV gambling channels (PDF, 138.0 KB) – Published 26 May 2009