Duncan concerned over Channel 4 funding

As well as the furore over Celebrity Big Brother, Channel 4 chief executive Andy Duncan expressed concern yesterday over the broadcaster's funding.

In his speech at the Oxford Media Convention, he emphasised Channel 4's need for new funding mechanisms as the UK approaches digital switchover, describing Ofcom's review into its situation as "critical".

The channel was gifted analogue spectrum when it launched, and Duncan said that when the digital switchover took place, it needed a replacement.

"We are facing real issues - the TV advertising market is coming under pressure and the cost of acquisitions have gone through the roof. They play an important role on the channel but margins have been massively squeezed. We are also facing issues in new media areas where returns are hard to make," Duncan said.

With Ofcom's review due at the end of March, Duncan said 2007 was the "most important" year the broadcaster had faced. He said he would prefer an "indirect mechanism" of funding but said he would not rule out direct public funding.

Yesterday, Carphone Warehouse pulled its £3 million sponsorship of Celebrity Big Brother with immediate effect.

Around 50 senior executives from the broadcaster's main programme suppliers, independent production companies, met with Duncan and director of television Kevin Lygo earlier this week to be told to "expect tougher and more selective decisions" on commissions. The broadcaster announced a £600 million budget freeze across all channels earlier in the month.