Strategic Partnership Deed of Agreement between the BBC and S4C This Deed of Agreement is made the xxx between: THE BRITISH BROADCASTING CORPORATION, a corporation incorporated under Royal Charter, whose principal office is at Broadcasting House, 1 Portland Place, London W1A 1AA (“BBC”); and S4C a statutory corporation of Parc Tŷ Glas, Llanishen, Cardiff, CF14 5DU (“S4C”). (together “the Parties”) WHEREAS th (A) On 17 October 2006, the Parties entered into a deed (the “Original Agreement”) in which they agreed upon the principles and procedures according to which a range of BBC licence fee funded programmes and other services would be provided by the BBC to S4C in a manner appropriate for the needs of public service broadcasting through the medium of the Welsh language. (B) The Original Agreement recognised the responsibilities and traditions of both organisations in providing high-quality public services to audiences in the Welsh language. and that both S4C and the BBC perform critical roles in supporting and nurturing the development of the Welsh language, and that the public value of Welsh language services, across various media and platforms, would benefit from a closer strategic partnership between the two broadcasters and the Parties intend that these principles are taken forward in this Agreement. It is agreed and this Deed witnesses as follows: 1.1 Section 58(1) of the Broadcasting Act 1990 provides that: For the purpose mentioned in subsection (1A) the BBC shall: (a) provide to the Welsh Authority (free of charge) sufficient television programmes in Welsh to occupy not less than ten hours’ transmission time per week; and (b) do so in a way which meets the reasonable requirements of the Authority. (1A) The purpose is to enable the Welsh Authority to fulfil— (a) so much of the public service remit for S4C as is contained in paragraph 3(2)(a) and (b) of Schedule 12 to the Communications Act 2003; and (b) so much of the public service remit for S4C Digital as is contained in paragraph 3(3) of that Schedule”. Nothing in this Deed diminishes or replaces that statutory duty. 1.2 S4C recognises that the BBC must operate within the duties placed upon it by its Royal Charter and the Agreement between it and the Secretary of State for Culture, Olympics, Media and Sport and must deal with the licence fee as set out therein. The BBC recognises that S4C is a statutory entity. As such S4C derives its powers from statute and is unable to act in a manner that is outside the specific powers granted to S4C by Parliament. S4C is under a duty to spend its grant-in-aid in accordance with the provisions of the Broadcasting Acts 1990 and 1996 and the Communications Act 2003. From 1 April 2013, S4C will be under an obligation to spend licence fee funding which it receives from the BBC Trust in accordance with an Operating Agreement between the BBC Trust and the S4C Authority. 1.3 The word partnership throughout this document is defined as the process of two bodies acting together with goodwill and co-operation. Nothing contained in this Deed shall be taken to imply that a legal partnership exists between the BBC and S4C. 1.4 References in this Deed to the BBC’s Royal Charter and its Agreement with the Secretary of State for Culture, Olympics, Media and Sport and to any statute, statutory provision, regulation, rule or code shall be construed as a reference to such Charter, Agreement, statute, statutory provision, regulation, rule or code as amended, modified, replaced or re-enacted from time to time. 1.5 This Deed sets out a strategic framework for the BBC’s renewed commitment to provide its Contributed Programming to S4C. A separate Operating Agreement specifies the scope of the wider S4C services to be funded out of the BBC licence fee from April 2013 until March 2017. Any application or interpretation of this Deed shall take into account the principles set forth in the Operating Agreement 2 Scope of the Agreement 2.1 This Deed and in particular the process set out at paragraph 5 shall be underpinned by two balancing obligations: 2.1.1 On the BBC to recognise that S4C is solely responsible for delivering its remit, its statutory duties (including duties in respect of expenditure of grant in aid) and its additional activities and objectives as set out in its Corporate Plan, Content Strategy and Statement of Programme Policy. The BBC both in its consultation and in its proposals, will respond positively and practically to S4C’s overall content strategy, and so seek to maximise the value delivered to the S4C services and audiences. 2.1.2 On S4C to recognise that the BBC’s contribution to S4C’s services pursuant to section 58 of the Broadcasting Act 1990 is an important element of the BBC’s remit and overall delivery to Welsh language audiences of its public purposes and the public service characteristics enshrined in its Charter and Agreement. Further, S4C recognises that the BBC and its Trust are solely responsible both for how they do this and for the value for money of the BBC’s expenditure, subject always to Section 58 of the Broadcasting Act 1990. 3 The BBC’s contribution of television programmes to S4C 3.1 The BBC shall provide S4C (free of charge) with sufficient television programmes in Welsh to occupy not less than 10 hours’ transmission time per week pursuant to its statutory obligations (the “Contributed Programming”) for exhibition on the S4C Services (as defined in Appendix 3) and otherwise in accordance with Appendix 3. The Contributed Programming shall be original first run Welsh language programming (“original” meaning new UK content and not repeats or acquisitions, except as agreed within the annual planning process set out in paragraph 5 below and set out within the Editorial Synopsis, and “first run” meaning that the Contributed Programming shall be exhibited in accordance with Appendix 3). Unless otherwise varied in the Editorial Synopsis, S4C shall have the rights in the Contributed Programming which are set out in Appendix 3 (“the Terms of Supply”). 3.2 Without limitation to the BBC’s statutory duty and commitment referred to at paragraphs 1.3 and 3.1 above the actual number of hours of programmes to be provided to S4C each year shall be determined during the annual planning cycle described below, and shall be subject to approval by the S4C Authority within the framework of its approval of the S4C Statement of annual Programme Policy and by the BBC Trust within the BBC’s annual strategic governance framework, and shall be included in the definition of “Contributed Programming”. Approval from either organisation shall not be unreasonably withheld or delayed. 4 Financial level of the BBC contribution 4.1 Subject to paragraphs 4.2 - 4.4 and Note 1, between the Financial Years 2013/14 and 2016/17 the financial value of the Contributed Programming and other programme- related and non-programme contributions (including, without limitation to the generality of the foregoing, sub-titling) from the BBC as reflected in each annual programming plan (together the “BBC’s Contribution”) will be as follows: 4.1.1 2013/14 £19.4 million – forecast 4.1.2 2014/15 £19.4 million – forecast 4.1.3 2015/16 £19.4 million – forecast 4.1.4 2016/2017 £19.4 million - forecast Note 1 The figures above are subject to a 2.5% tolerance to allow for short-term timing differences across the year end. Any variances from the figures set out above would be matched by balancing variances in the following period, save that the sums set out above must be expended in full on the BBC’s Contribution by the end of the 2016/17 Financial Year unless otherwise agreed by S4C. 4.2 For the avoidance of doubt the BBC may at any time increase the forecast budget for for 2013/14, 2014/15, 2015/2016 and 2016/2017 and will inform S4C of any such decision. 4.3 Any BBC proposal to reduce the planned real financial value of the contribution from the levels indicated in this Deed shall be subject to prior consultation between the S4C Authority and the BBC Trust under the BBC’s Royal Charter. 4.4 The BBC Trust shall not consent to any reduction in the financial level of the forecast contribution in 4.1.1, 4.1.2 and 4.1.3 and 4.1.4 unless it is satisfied that the public value of the BBC’s contribution to S4C, and to the S4C Service as a whole, shall not be reduced by the proposed change. 5. Annual editorial planning framework 5.1 In this section, in all cases where agreement is required between the BBC and S4C, or between the Audience Council for Wales (ACW) and the Authority, or between the BBC Trust and the Authority, each party shall be under an equal and balancing obligation to use all reasonable endeavours to reach such agreement. Neither party shall act unreasonably or cause undue delay. 5.2 The understanding of both the BBC and S4C in relation to the supply by the BBC of the drama series “Pobol y Cwm” is more particularly set out in a framework agreement made between the parties and of even date with this Deed, but insofar as “Pobol y Cwm” forms part of the Contributed Programming, the provisions of this Deed shall also apply. However, in circumstances where either party intends to implement a material change of programme supply in the areas of Sport or Pobol y Cwm during the term of this Deed, either party shall: 5.2.1 in the case of Sport content featuring international rugby and/or RaboDirect Pro12 provided as part of the Contributed Programming each give the other at least twenty four months written notice of such an intention unless the notice period is determined by the term of any relevant underlying sports agreement; 5.2.2 in the case of Pobol y Cwm either party shall each give the other such notice as may be required in accordance with the provisions set out in the framework agreement.