Yesterday saw Channel 4 walk out on merger talks with Five, after concluding that obstacles to a tie-up between a state-owned and a commercial broadcaster were too difficult to overcome, according to a report in The Times.
Andy Duncan, chief executive of Channel 4 said: “With concerns being raised about our future funding it was legitimate for Channel 4 to explore this merger, but we’ve concluded that protecting and strengthening Channel 4’s public service role isn’t compatible with the full merger that was proposed.”
The decision leaves Channel 4 to concentrate on trying to secure public funds to protect its future. Five, on the other hand, is now under pressure to expand to avoid closure.
With Five’s shareholders (German television group RTL and United Business Media) hoping to win a 40% share of the combined business and Channel 4 believing its rival deserved no more than around 15%, the two broadcasters were far from agreeing a deal, says The Times.
A combined broadcaster would also have needed to satisfy Ofcom, the industry’s regulator, as well as the Government, neither of which wanted Channel 4 privatised. Five would have had to satisfy shareholders’ desire to make a profit.
In a statement yesterday, Five claimed that “the complexity” of bringing two broadcasters together was “too great”.
While Channel 4’s Duncan has ruled out a full strategic merger, he has made it clear that Channel 4 was willing to continue exploring smaller scale operational tie-ups with Five. The two broadcasters have previously jointly acquired packages of movie rights.
Many believed the reason behind the merger discussions was widely held belief that, individually, neither Channel 4 or Five are big enough to survive in the multi-channel world, as the number of digital channels continue to proliferate and further fragment television as a medium (see RTL Expresses Interest In C4 and Five Merger).
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