Channel 4 And Five In Discussions Over Possible Merger
UK terrestrial broadcasters Channel 4 and Five are believed to have held exploratory merger discussions within the last six months.
Reports suggest that Channel 4 chief executive Mark Thompson and Lord Hollick, chairman of United Business Media, the minority shareholder in the Five network, have met to discuss the possibility of integration.
It had been known that the two commercial broadcasters were interested in the possibility of bringing their advertising sales operations closer together to compete more effectively against the newly merged ITV (see ITV Rivals Pushed Towards Sales House Consolidation).
However, unnamed sources quoted by The Business claim the discussions have gone further than commercial co-operation with Thompson and Hollick examining options for a possible merger at two lunch meeting towards the end of last year.
One senior source close to both Channel 4 and Five told the paper: “They have indeed talked. Contrary to what is being admitted, the discussion ranged rather wider than the simple matter of airtime sales.”
However, it is unclear how far talks could go given that Channel 4 is a state-owned company with a public service charter to provide distinctive programmes for minority tastes and Five is a more populist venture 65% owned by RTL, a European broadcasting giant and division on Bertelsmann.
According to The Business, one possible solution could be setting up a trust to preserve the public-service obligations of Channel 4, while allowing it to merge with Five. Thompson and Hollick are also reported to have held discussions with RTL about the logistical and regulatory problems of a potential merger.
A merger of the two broadcasters would require Government approval and a change to Channel 4’s charter, which would prove controversial given that the broadcaster is owned by the state and funded by advertising sales.
Earlier this year Ofcom surprised the broadcasting industry by announcing that Luke Johnson, owner of The Ivy and the man who floated Pizza Express, will replace Vanni Treves as chairman of Channel 4. The appointment is being seen by some a move towards greater commercialisation for the broadcaster (see Ofcom Names Johnson As New Channel 4 Chairman).
Channel 4: 020 7396 4444 www.channel4.co.uk Five: 020 7550 5555 www.five.tv
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