Assurances by Granada Media plc following publication of the Competition Commission report 'Carlton Communications Plc and Granada Group plc and United News and Media plc'

No. ME/1645/02

Assurances to the Director General of Fair Trading following a report of the Competition Commission 

Assurances by Granada Media plc

Whereas the Competition Commission (the 'Commission') has published a report entitled 'Carlton Communications Plc and Granada Group plc and United News and Media plc: A report on the three proposed mergers' (the 'Report');

And whereas Granada Media plc ('Granada') has since the publication of the Report announced its intention to acquire certain television interests of United News and Media plc;

The following assurances are given by Granada to the Director General of Fair Trading ('the Director') in order to give effect to the Commission's suggestion at paragraph 2.124(b) of the Report:

Existing contracts for the supply of advertising airtime services

1.  (1) Where a Small Licensee gives Written Notice to Granada requesting the termination of an Existing Contract with Granada, Granada shall, with effect either from such date as may be agreed in writing between Granada and the Small Licensee, or, in default of such agreement, on such date as is 25 weeks after the date on which the Written Notice has been received by Granada:

a. treat the Existing Contract as terminated; and

b. release the Small Licensee from all future obligations to Granada under the Existing Contract.

(2) Save as provided in clause 2 below, paragraph (1) above is without prejudice to the continuation of any rights or obligations which have arisen under the Existing Contract prior to its termination pursuant to paragraph (1) above.

2. Where but for these assurances a Small Licensee would be liable, whether under the Existing Contract or otherwise, to pay compensation to Granada in respect of the early termination of an Existing Contract pursuant to clause 1 above:

a. Granada shall waive all rights to payment of such compensation where it receives from the Small Licensee the full fee payable under the Existing Contract for a period of at least 25 weeks from the date on which the Written Notice was received by Granada; and

b. in any other case, Granada shall limit any claim for payment of such compensation from the Small Licensee to an amount that is equal to the difference between:

i. the full fee that Granada would have been entitled to receive from the Small Licensee under the Existing Contract during the period of 25 weeks from the date on which the Written Notice was received by Granada; and

ii. the fee actually paid to Granada by the Small Licensee during the said period of 25 weeks in respect of such services as the Small Licensee may under the Existing Contract request Granada to provide during that period. 

3. (1) Granada shall, within one week of the date of these assurances, circulate to all Small Licensees with whom it has an Existing Contract a statement conveying the substance of these assurances and stating the Address to which Written Notices above should be sent.

(2) If a company becomes a Subsidiary of Granada or Granada otherwise acquires the benefit of an Existing Contract with a Small Licensee, the obligation in paragraph (1) above shall apply save that any statement circulated pursuant to it shall be circulated within one week of the company becoming a Subsidiary of Granada or, as the case may be, of Granada otherwise acquiring the benefit of the Existing Contract of the Small Licensee.

Information

4. Granada shall provide promptly to the Director such information as he may require for the purposes of ascertaining that the above assurances are being or will be complied with.

Duration

5. These assurances shall cease to have effect in relation to a Small Licensee upon either:

a. the expiry or termination of the Existing Contract of that Small Licensee; or

b. the Small Licensee being released from its Existing Contract pursuant to clause 1 above.

Subsidiaries and successors

6. Granada shall procure that:

a. its Subsidiaries from time to time; and

b. any successor in title to all or part of its Sales House Business,
comply with these assurances as if they had given them.

Interpretation

7. (1) The Interpretation Act 1978 shall apply to these assurances as it applies to Acts of Parliament.

(2) For the purpose of these assurances:
'Address' means the address specified by Granada in a statement circulated in accordance with paragraph (1) of clause 3 above and shall include a postal address and facsimile number and may also include an electronic mail address;

'Business' has the meaning given by section 137(2) of the Act;

'Contract' means a contract for the supply of advertising airtime services;

'Existing Contract' means a Contract entered into before the date of these assurances;

'Sales House Business' means the Business of selling advertising airtime on behalf of television broadcasters;

'Small Licensee' means any of the following holders of a regional Channel 3 licence under the Broadcasting Act 1990 (as amended):

a. Border Television plc;
b. Channel Television Limited;
c. Grampian Television plc;
d. Scottish Television plc; and
e. Ulster Television plc;

'Subsidiary' has the meaning given by section 736(1) of the Companies Act 1985 (as amended);

'Working Day' means any day of the week other than a Saturday, Sunday or any other day which is a public holiday in England; and

'Written Notice' means written notice given in accordance with clause 1 above.

(3) Written Notice may be given by hand, by prepaid post or by facsimile or, where the Address includes an electronic mail address, any other form of electronic transmission and shall be deemed to have been received by Granada:
where notice is delivered by hand, on the day that it is delivered to the Address, or where delivery is after 1800 hours or is not on a Working Day on the next following Working Day;

a. where notice is given by prepaid post, on the second Working Day after the day on which it is posted in a prepaid envelope addressed to the Address; or

b. where notice is given by facsimile or any other form of electronic transmission, on the day on which it is sent to the Address, or where it is sent after 1800 hours or on a day which is not a Working Day on the next following Working Day.

c. Signed as a Deed on behalf of Granada Media plc by:

……………………………… )
(Signature)                           ) Director
……………………………… )
(Print name)

……………………………… )
(Signature )                                ) Director/Secretary
……………………………… )
(Print name)

 

………………………………
Date

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