Relicensing of the Channel 3 and Channel 5 licences

19 September 2023

Methodology for a review of the financial terms of the Channel 3 and Channel 5 licences

The current Channel 3 and Channel 5 licences expire on 31 December 2024. Under the Communications Act 2003, licensees have the right to apply to Ofcom to renew their licences for a further ten-year licence period (from 1 January 2025 to 31 December 2034).

As part of the licence renewal process, we must determine the financial terms on which the licences will be renewed. We must notify the licensees of our determination and if they accept the terms, we must subsequently issue the renewed licences as soon as reasonably practicable.

This statement sets out our methodology for determining the financial terms of the Channel 3 and Channel 5 licences. We have broadly followed the same approach as the methodology used the last time we determined the financial terms of the Channel 3 and Channel 5 licences in 2014. We have made some updates to reflect current market and regulatory uncertainties, such as the proposed changes to the regulatory framework in the draft Media Bill, and comments from stakeholders in response to our consultation, which closed on 28 July 2023.

Statement

Statement: Methodology for a review of the financial terms of the Channel 3 and Channel 5 licences (PDF, 693.8 KB)

Relicensing process

Before we can renew the Channel 3 and Channel 5 licences, Ofcom has a duty under section 229 of the Communications Act to submit a report to the Secretary of State ahead of a new licensing round setting out our opinion on the ability of the Channel 3 and Channel 5 licensees to contribute to the fulfilment of the purposes of public service broadcasting (PSB), at a commercially sustainable cost, over the next ten-year licence period. On receipt of this report, the Secretary of State must decide whether to block licence renewal or amend some aspects of the licence.

You can find our section 229 report and the Secretary of State’s decision to proceed with licence renewal below.