Channel4/Five merger “would not be approved”

A merger of Channel 4 and Five would not be approved by competition authorities, according to a new report by Enders Analysis.

The report says that if previous rulings are taken into account – such as those on the merger of Carlton and Granada, BSkyB’s 17.9% stake in ITV and Project Kangaroo – it is unlikely that a merger of Five and Channel 4 would be approved.

A merger between the two broadcasters has been mooted as a possible way of plugging the £150 million-a-year funding gap that Channel 4 says it will face by 2012.

However, the report says that Channel 4’s funding gap has “more to do with the company’s laudable aspirations to extend its business into many new areas and following in the slipstream of the BBC than any real dangers to its core business during the recession”.

It adds that it would be difficult for the merger to get through the competition approval process as a combined Channel 4 and Five would control 34% of the UK TV ad market and, as ITV controls about 41%, the two sales houses would control about 75% of all TV advertising in the UK.

Competition Commission chairman Peter Freeman, who handled the rulings against BSkyB’s 17.9% stake in ITV and Project Kangaroo, “is almost bound to be as severe” in ruling on a Channel 4/Five merger, said Enders.

Channel Four: 020 7396 4444 www.channel4.com Five: 020 7550 5555 www.five.tv