Following the breakdown of merger talks between Five and Channel 4 last week, speculation was mounting over the weekend in relation to RTL and United Business Media, owners of Five, who are believed to be considering a merger with Flextech, part of cable company Telewest.
There have also been rumours that Channel 4 is now looking to pursue a collaboration deal with the BBC. According to reports in the press, 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. 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(see Channel 4 Walks Out On Five).
