Thompson blesses Channel 4, Five marriage

Source: Variety

BBC topper Mark Thompson is backing a proposed merger between Blighty's cash-strapped pubcaster Channel 4 and commercial web Five, part of RTL's European broadcasting empire.

Thompson called for "simplification, consolidation and the right kind of public-private collaboration," in an article for the Financial Times.

The statement is part of a campaign by the BBC director general to avoid being forced to share the license fee -- paid by all U.K. households -- with rival webs.

His remarks come at the start of a week that will see two high-profile speeches on broadcasting as regulators and the government prepare to make key decisions over Channel 4's future funding.

Thompson, who backed the idea of a merger when he ran Channel 4 five years ago, wrote: "Consolidation could offer ... immediate cost savings and an increase in scale in key markets from advertising sales to program acquisition, and the chance for a smaller number of larger players to focus on credible and affordable digital plans.

"If the goal is sustainable public service broadcasting beyond the BBC in the long-term, consolidation may be part of the solution."

A merger is believed to be backed by influential policy-makers including new broadcasting minister Stephen Carter, who will make a keynote speech on Wednesday in London. RTL is also believed to back the proposal.

But Channel 4, which, unlike the BBC, is financed by advertising and claims it is facing a funding gap of around £150 million ($223 million) a year, opposes the idea and would prefer a direct subsidy -- either a slice of the license fee or a partnership with the BBC's commercial arm, BBC Worldwide.

Channel 4 CEO Andy Duncan will outline his case on Thursday before ministers decide how the web should be funded.

A merger is certain to be opposed by ITV, Blighty's biggest commercial terrestrial web, on the grounds that it would be anti-competitive.

A recent report from research firm Enders Analysis backed this view and said that Channel 4 was in "relatively good health" with "very substantial reserves that can see it through the recession."

© Variety