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Last Updated: Friday, 27 February, 2004, 16:41 GMT
Channel 4 and Five discuss merger
Comedy show Banzai
Banzai is one of Channel 4's more quirky offerings
Television broadcasters Channel 4 and rival Five have held merger discussions, the BBC understands.

Talks about jointly selling advertising time extended to informal discussions about the possibility of a merger.

A tie-up between the channel and its commercial rival would provide stronger competition to Britain's newly emergent broadcasting giant, ITV plc.

However, any change of ownership at publicly-owned Channel 4 would require an act of parliament.

ITV worries

Sources close to the broadcasters confirmed informal talks were taking place.

Graham Lovelace, media analyst at consultants Lovelacemedia, said: "It's all linked to the merger of Carlton and Granada to form ITV plc.

Channel 4 might be interested in it because they are declining and we are growing
Five spokesman

"Channel 4 and other commercial broadcasters are worried about the creation of a single ITV advertising sales house."

He said a merger between Channel 4 and Five - with Channel 4 playing the role of senior partner to Five's "cheeky sister" - could benefit both companies.

Closer ties

But he added: "Channel 4 is signalling to the regulator Ofcom and the government that its days as a publicly-owned company are numbered unless the government puts more money in or Channel 4 gets together with similar players in the industry."

A spokesman for Five described talk of a merger between the two companies as "just speculation".

"Channel 4 might be interested in it because they are declining and we are growing," he told BBC news online.

Five is jointly owned by Britain's United Business Media and German broadcaster RTL.

Mr Thompson is understood to believe that both channels would fare better in the increasingly competitive UK commercial sector if they worked more closely together.

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