C4 and C5 look at sales merger

Consolidation among ITV owners could lead to ‘snowball effect’ on rules covering airtime sales

Channels 4 and 5 could merge their airtime sales operations if regulations are changed following consolidation among ITV’s owners United News & Media, Carlton and Granada.

Sources say that initial soundings have been taken between the two companies’ chief executives, Channel 4’s Michael Jackson and Channel 5’s David Elstein, over the plan.

Elstein strongly denies that any talks have taken place, but says: “I haven’t considered it except as a theoretical possibility. At one level it looks obviously positive… If the rules were to change, we would look at it.”

Channel 4 commercial director Andy Barnes says there have been “no discussions between Channel 4 and Channel 5” on the subject and a sales merger could not be considered “until those rules change”.

Current rules – which forbid a Channel 4/5 sales merger – will be turned on their head if Trade Secretary Stephen Byers allows Carlton to merge with United News & Media or Granada to merge with either of them.

An ITC insider says permission for any of the possible deals would lead to a “snowball effect” on rules covering airtime sales, with whole licence sections having to be reviewed.

There has been fierce speculation among media agencies about the implications of the changes, with suggestions that Sky could sell Flextech airtime and Channel 4 could sell 5’s ad space. But one insider asks: “What would be in it for Channel 4?” The channel turned over &£600m last year, compared with Channel 5’s &£180m.

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