Five Looks To Flextech Merger To Secure Future

Following the breakdown of merger talks between Five and Channel 4 last week, speculation has mounted over a merger between Five and digital broadcaster, Flextech, part of cable company Telewest.

According to reports over the weekend Five’s principal shareholders, RTL and United Business Media, are considering a merger which could secure the broadcaster’s continued survival in an increasingly competitive multi-channel future.

Rumours have also circulated that Channel 4 is to pursue a collaboration deal with the BBC. According to press reports, Channel 4 is hoping the BBC will pay the majority of the cost of upgrading the TV transmission network to digital in time for the analogue signal switch-off in 2012 (see Channel 4 To Seek Public Funding To Combat Sliding Share). The broadcaster fears it will lose up to £100 million in advertising revenues during this period.

A possible merger with Flextech would provide Five with a selection of channels such as UK Gold and UK History, created through the UK TV joint venture with the BBC. Under the terms of this deal, however, a change of control in Flextech would necessitate a renewal of the BBC contract which could increase costs.

Last week’s decision by Channel 4, to walk out on merger talks, has left Five under pressure to expand to avoid closure. The decision against a full strategic merger also leaves Channel 4 attempting to protect its future, by trying to secure public funding

Five: 020 7550 5555 www.five.tv

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