Channel 4 and RTL bosses opposed to merits of C4/Five merger

LONDON - The putative merger between Channel 4 and Five has been described as a "tragedy" by the chairman of C4, but a solution with "long-term industrial logic" by the chief executive of Five owner RTL.

The two men have entered the public debate in the wake of last week's leaks from a Government report on the future of Britain's media sector suggesting plans for Channel 4 to become part of a "merged entity". The claim was later denied by the Department for Culture, Media and Sport.

Five appears to be the favoured match for Channel 4, with the latter's efforts to secure a merger with -- or win control of -- BBC Worldwide dead in the water according to reports last week.

At the weekend C4 redoubled its opposition to being united with Five through a newspaper interview given by its chairman Luke Johnson, following his chief executive Andy Duncan's prior comment that a merger would be like mixing oil and water.

Johnson told The Guardian the merger "would be a tragedy" and "make his tenure as chairman a failure".

He also disclosed that he had met RTL chief executive Gerhard Zeiler in December to talk about a merger after encouragement from the Government.

Separately The Sunday Times reported that Johnson had talked to BT's chief executive Ian Livingston about a possible tie-up on more than one occasion last year, before identifying BBC Worldwide as an alternative partner.

"They [BT] have obviously got a pipe into every home in the country, they have got vast scale and they are pretty advanced technologically," said Johnson to the Sunday Times. "There is some complementarity."

While C4 opposes the merger, Zeiler has used a Financial Times opinion piece today to argue that a merger makes sense for both companies and for public service broadcasting.

"With this merger, the future of [Channel 4 and Five] as public service channels with their own identities would be guaranteed, delivering real benefits to the public while standing on their own two feet commercially.

"The government has a matchless opportunity to create an entity able to deliver new public service content in new ways - liberated from linear transmission and made available on demand, on any device, how you want it."

Zeiler also commented on the similarity of the culture at the two companies.

"Both are funded by advertising, both commission programmes from outside producers rather than making them in-house and both are reliant on a mix of home-grown and acquired programming."

Ofcom's report on the future of public service broadcasting is due to be published on Wednesday, with communication minister Lord Carter's Digital Britain report following next Monday.

 

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