Response to Ofcom

SMG PLC
29 June 2005





SMG Response to New Scottish TV & Grampian TV Licence Fee Tax Terms

SMG plc ('SMG') estimates that the proposed new licence fee tax terms for its
Scottish TV and Grampian TV franchises, announced today by OFCOM, together
represent a reduction in analogue television licence costs of approximately
£4.5m - £5m, to approximately £1m - £1.5m in 2005.

The new terms are as follows:
Scottish TV - Cash Bid: £10,000 pa (previously £1.8m pa); PQR: 0% (previously
11%).
Grampian TV - Cash Bid: £60,000 pa (previously £110,000); PQR: 6% (previously
6%).
These licence costs are expected to further reduce as a result of rising digital
penetration until digital switchover, at which point the combined licence costs
will be £70,000 per annum. SMG's digital television licences remain at no cost.

As reported in its AGM statement earlier in June, SMG is trading in line with
management's expectations, although advertisers remain cautious and advertising
markets have become more short term. As a result, the likely outcome of the
important Autumn trading period is not yet apparent. Should markets firm, the
Group plans to examine the option of reinvesting a proportion of the licence fee
reduction in its faster growth businesses.

Commenting on today's announcement, Andrew Flanagan, Chief Executive of SMG,
said:

'We're pleased that OFCOM have recognised that in the increasingly competitive
world of multi-channel television our licence fee tax costs had to come down.
This settlement, along with the outcome of the Public Service Broadcasting
Review, serves to secure the future of the Scottish TV and Grampian TV
franchises to 2014 - through digital switchover and beyond. And while today's
announcement provides SMG with a firm foundation for our TV broadcasting
businesses, it also presents the potential opportunity for us to maximise growth
opportunities around the Group as a whole.'

29 June 2005

Further enquiries:

Callum Spreng Tel: [phone]
Corporate Affairs Director, SMG plc



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