��������pk10

The broadcaster is now rumoured to have turned its eye to fellow commercial broadcaster Flextech, which owns the UKTV nest of TV channels jointly with BBC Worldwide as well as a number of other multi-channel brands such as Bravo, Living TV and Trouble and the multi-channel sales house IDS.

“Our shareholders are looking at a variety of different strategic options,” said Sue Robertson, Five’s director of corporate affairs.

A deal with the Telewest owned Flextech would give Five access to a multi-channel portfolio – something the terrestrial broadcaster currently lacks.

A senior manger at one of the terrestrial broadcasters said this week he had heard rumours that conversations were taking place between television companies about the future of UKTV, owned jointly by Flextech and the BBC.

With respect to its talks with C4, Five – which is owned by RTL and United Business Media – has been speaking to the public broadcaster about joining forces for the best part of a year.

But it emerged at the end of last week that Andy Duncan, Channel 4’s recently installed new chief executive, had ruled out a full merger between the two channels once and for all.

Duncan 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.”

But he did not rule out other smaller-scale collaborations between the two broadcasters in the future.

Both parties put the decision down to the incompatibility between C4’s public service interests and Five’s commercial ones.

Luke Johnson, Channel 4’s chairman, said: “The board of Channel 4 has looked in detail at this proposed merger, but we can’t make sense of it either in cultural or commercial terms. We couldn’t reach agreement with Five and have concluded the deal isn’t in the interests of our stakeholders, especially our viewers.”

Five’s statement read: “The board of Five has announced that discussions on a potential merger with Channel 4 have ended.

Although the benefits of a merger would have been significant, the shareholders of Five have come to the conclusion that the complexity of combining a commercial and a publicly owned entity, and the constraints on the likely structure, would have been too great and have therefore ended the discussions.”.

Five, unlike its commercial terrestrial rivals ITV and Channel 4, has no multi-channel brands and a tie-up with the Telewest-owned Flextech would extend its reach.

The terrestrial broadcaster has to compete with an increasingly powerful BSkyB. ITV already operates ITV News, ITV2 and ITV3 and is planning to launch more digital TV stations in the future and C4 runs the premium digital TV brands E4 and Film Four.

Meanwhile, Channel 4’s Duncan is expected to appeal to media regulator Ofcom this week for public funding and is understood to be planning to put the case to the regulator for Channel 4 to run the newly proposed Public Service Publisher.

Ofcom suggested the creation of a Public Service Publisher in the second phase of its Public Service Broadcasting review, published earlier this month that would create and distribute content that works in a converging and digital media age.

������ Deborah Bonello