BBC chief backs Channel 4/Five merger

Mark Thompson proposes lifting regulatory restrictions

LONDON -- BBC director general Mark Thompson has backed the idea of a Channel 4/Five merger and has called for regulatory restrictions on its commercial rivals to be scaled back.

Writing in the Financial Times on Monday, Thompson said that a deal would have advantages for both players in terms of acquisitions and digital plans.

Thompson's comments come as the government and regulators prepare to unveil their proposals for Britain's public service broadcasters amid a climate of economic gloom and digital uncertainty.

"Consolidation (for 4 and Five) could offer the prospect of both short- and long-term benefits: immediate cost savings and an increase in scale in key markets from advertising sales to program acquisition," the BBC boss wrote, saying the plans would also allow "a smaller number of larger players to focus on credible and affordable digital plans."

As chief executive of Channel 4 in 2004, Thompson initiated merger talks with RTL-owned Five, but the impetus for the project was halted when he departed Channel 4 to become the head of the BBC.

His successor at Channel 4, Andy Duncan, ruled out the possibility within months of his arrival at Channel 4, and has not offered any support for the idea since.

It is thought by insiders that he would resist merger plans even if they were given the regulatory green light.

Rival ITV is also thought likely to fight the idea of a 4/Five merger, fearing that it will create a bigger, more competitive rival.

In his Financial Times article Thompson said ITV should see its regulatory burden shed and should have more freedom about how it sells its advertising, saying it made "good sense to look at the question again" given the "multiple threats ITV faces and pressures on its program budget."

He also reiterated his pledge to offer support to commercial players facing difficult times in the form of shared digital and on-demand technology and potential deals on rights exploitation.

"We must share the benefits of our scale and technology, as well as looking at how BBC Worldwide, our commercial arm, can help," he added.