C4 confirms BBC funding option to meet shortfall

LONDON – Channel 4 has confirmed it is considering a link-up with the BBC to meet its public service remit and £100m annual funding shortfall caused by achieving digital switchover by 2012.

The broadcaster admitted that it is exploring options, and that part-funding by the BBC licence fee would make a viable one because it would save Channel 4 around £50m a year.

The BBC would be able to subsidise Channel 4 as it changes from analogue to digital, in line with culture secretary Tessa Jowell's analogue switch-off date of 2012.

Other options include the much-talked about merger with Five, which would involve merging the broadcasters two sales houses in the same way as the Granada/Carlton merger earlier this year. However, Channel 4 and Five would have to lobby the government to introduce changes to the current ownership structure, which would take time.

Another possibility is the merger of Channel 4 International, the distribution arm of C4, with BBC Worldwide, the corporation's commercial arm, following Ofcom's changes to independent production companies' terms of trade.

Channel 4 chief executive Andy Duncan and chairman Luke Johnson are expected to make a decision by the end of the month.

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