Channel 4 stokes talk of Five merger

Published on Wednesday 21 April 2004 01:00

CHANNEL 4 reheated the prospect of a merger with rival broadcaster Five yesterday by admitting that it may need to change its publicly-owned status in favour of "greater commercial flexibility".

Channel 4 held preliminary merger talks with Five’s joint owners, European broadcaster RTL and United Business Media, last month. But if any such deal were to go ahead, major legislation would be required to privatise Channel 4 or change its remit.

Channel 4, home to Big Brother and the soon-to-end US sitcom Friends, is publicly owned but is funded by advertising, unlike the BBC, which is funded by a mandatory annual tax levied on TV-set owners.

Channel 4 chief executive Mark Thompson - who yesterday ruled himself out of the running for the BBC Director General’s job - said: "The competitive pressures unleashed by technological change and market consolidation are putting our economic model under strain and may eventually threaten our ability to continue funding the kind of ambitious and diverse schedule that the channel assembled in 2003."

He added: "Channel 4 may need to examine a range of alternative future funding options, including a possible change in status to give greater commercial flexibility while protecting the remit."

Thompson’s remarks came as Channel 4 reported a 2003 pre-tax profit of 45 million up from 9.21m a year earlier. Turnover and advertising and sponsorship revenues were roughly flat. However, the broadcaster cut costs and trimmed losses at its E4 digital channel.