Channel 4 Confirms Merger Discussions With Five
Rumours of exploratory merger talks between Channel 4 and Five have been confirmed with the possibility of a full merger of the two commercial broadcasters now being discussed.
Earlier this month is was suggested that Channel 4 chief executive Mark Thompson and Lord Hollick, chairman of United Business Media, the minority shareholder in the Five network, had met within the last six months to discuss the possibility of integration.
According to a report in the Guardian, Thompson has confirmed that meetings have been held and that the board of directors at Channel 4 has been asked to appoint financial advisers to explore the logistics of a potential merger.
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.
Andrew Canter, broadcast director at the Media Planning Group believes that, following ITV, another large-scale broadcasting merger would be difficult to broker. He said: “The competition authorities would be a stumbling block for a start. Any more consolidation in television will not be welcomed at all, certainly not by advertising agencies or media agencies.”
It is understood that 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.
Any merger would also require the sale of Channel 4, a decision which could only be approved by parliament and which would be worth around £2 billion. Canter believes the whole process would be too tricky to pull off. He said: “They want to protect their position in the market, it’s a defensive strategy but I think it would be very difficult for it to happen. It would be a very long and drawn out process taking months if not years.”
The renewed speculation concerning the merger follows the announcement that Five’s deputy chief executive, Nick Milligan, has been appointed managing director of BSkyB’s advertising sales operation (see BSkyB Confirms Milligan To Oversee Advertising Sales Arm).
Channel 4: 020 7396 4444 www.channel.4.co.uk
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