UK-Licensed Television Broadcasters Weighing Brexit Options, IHS Markit Says

February 26, 2019

The UK is due to leave the EU at the end of March, and television channels targeting EU countries will require new licenses. Of the 1,039 cable and satellite TV channels licensed by UK-regulator Ofcom, 700 target other countries. According to business information provider IHS Markit (Nasdaq: INFO), the companies most affected include Discovery, with more than 100 channels licensed by Ofcom, Sky and Sony, with 40 channels each. More than 100 channels that reach viewers in the UK and Republic of Ireland would require also re-licensing.

"Thanks to its membership of the EU, the UK has been the main beneficiary of an explosion in the cable and satellite TV business in Europe over the past two or three decades,” said Tim Westcott , director of research and analysis, channels and programming, IHS Markit. “The likely loss of much of this business is one of the many unintended consequences of Brexit.”

According to “Leave or Remain: UK-licensed broadcasters weigh up Brexit options” , a new report from IHS Markit, if the UK leaves the EU with no deal, which is still a possibility, any channels established in the UK but transmitting to an EU member state will need new licenses from one of those EU states. However, if the UK leaves under the deal negotiated between the UK and the EU, it would have just under two years before the end of the proposed transitional implementation period, during which the UK will continue to participate in the Customs Union and the Single Market. This implementation period would end on December 31, 2020. However, the deal was decisively rejected by the UK Parliament in a vote on January 15, 2019.

"Some companies already have offices, editorial teams and workforces spread across a number of EU states,” said Aled Evans, senior research analyst, channels and programming at IHS Markit. “For these broadcasters, adjusting their business operations to satisfy the establishment criteria may prove relatively straightforward. There will certainly be a lot of short-term disruption, especially if hundreds of channels require new licenses in a few weeks' time. International broadcasters would clearly like to have had more clarity about future regulatory links between the UK and the EU at this late stage in the process.”