Dan Sabbagh, Media Editor
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The Director-General of the BBC is understood to be pushing for a merger between Channel 4 and Five, to head off a political raid on the licence fee or on BBC Worldwide, the corporation’s commercial unit.
Mark Thompson held talks with Gerhard Zeiler, the chief executive of RTL, Five’s owner, before Christmas, creating an informal alliance to promote what would amount to a part-privatisation of Channel 4.
Without naming either broadcaster, Mr Thompson wrote yesterday that “consolidation could offer the prospect of both short-term and long-term benefits” to commercial channels that were under pressure.
However, his intervention in Channel 4’s affairs left the broadcaster and some of its allies unimpressed. Critics accused the BBC boss of throwing up a smokescreen to prevent BBC assets being used to prop up Channel 4, which is state-owned.
John McVay, the chief executive of PACT, the trade body representing independent production companies, said: “This is sensible as a strategy to deflect attention from any serious discussion about what the BBC might have to give up. There need to be solutions that get extra cash in the broadcasting system now.”
The Government is likely to provide some indication of the future of Channel 4 in the next fortnight, when Andy Burnham, the Culture Secretary, gives a speech at the Oxford Media Convention on January 22 before the publication of the Government’s Digital Britain report, which is expected on January 26.
Relations between Mr Thompson and Andy Duncan, Channel 4’s chief executive, are poor. The men are talking separately about whether the BBC can provide long-term help to Channel 4, but discussions are progressing slowly because the BBC is unwilling to concede to Channel 4’s demands.
Channel 4 believes that it needs about £100 million a year to safeguard its programming mix for the next decade, and says that only a structural solution, such as taking over some or all of BBC Worldwide, will solve its problem. BBC Worldwide made a £112.5 million profit last year.
Mr Thompson believes that Channel 4’s problems are exaggerated and, in an attempt to maintain the present scale of the BBC, is willing to promote an alternative solution. A merger between Channel 4 and Five – billed as a “public-private partnership” – would require no public money.
RTL is keen on a deal, which would make Five part of a commercial broadcaster that could challenge ITV, and says that it is willing to leave the State as a majority shareholder in the enlarged company. Savings generated would help to maintain programme spending for Channel 4.
A Five4 combination also revives a deal that Mr Thompson tried when he was running Channel 4, before he took over the BBC in 2004. Mr Duncan, his successor, ditched those talks and remains opposed to any form of privatisation. A spokesman for Channel 4 said yesterday: “A merger with Five is not a solution that allows Channel 4 to run a not-for-profit organisation delivering a public service”.
The debate is likely to run for several months. Digital Britain is not expected to give a final decision, although it might provide some indication of preferred options. At present, the Five4 merger and a 4-Worldwide deal are the frontrunners.
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Why not merge all 3 units, a Five4 merger funded by BBC Worldwide.
This would then make the BBC a wholely Television and Radio company, and not a state company trying to become a commercial company.
If the BBC needs to save money it could always drop BBC 3 & 4 television channels.
Chris, Caernarfon, Wales
Come 2012 when the digital switch over happens and most people will have access to 30-40+ channels the real issue should be whether there is justification in the BBC being subsidised as much as it is.
If Channel 4 needs £100m per year then why does the Beeb need billions?
Russ, High Wycombe, UK
The only reason the greedy BBC is promoting this is because they don't want the BBC to have BBC Worldwide or any BBC TV Licence money.
John, Salford/Eccles, England