Express takeover 

23 July 2010

Another chapter in Five’s turbulent history begins with Richard Desmond’s acquisition of Channel Five from RTL for £103.5m being finally confirmed today after months of negotiation (and speculation from the press).

This deal suits all parties very nicely; RTL gets rid of its troublesome “English patient” for a better-than-expected sum, and Desmond gets a whole new televisual plaything with virtually zero chance of the deal being vetoed by Ofcom (or anyone else for that matter) because he already has a broadcasting licence for his (ahem) porn channels.

Channel Five has suffered recently despite being profitable ten years ago; indeed it’s arguable that RTL perhaps didn’t properly appreciate what was really required of the channel in order for it to survive in the UK, and Five was effectively left to stagnate whilst its continental owner concentrated resources on more profitable ventures elsewhere.

For one thing, Five had to give up on its previously-allocated digital terrestrial HD channel slot for financial reasons (at least until 2012), thereby allowing the BBC to claim this slot for a full-time HD broadcast of BBC One which will launch this Autumn. (Five HD has just managed to appear via satellite and cable services.)

However Channel Five has always had a problem of being fifth in the “pecking order” of terrestrial TV broadcasting, hence unable to go down the specialist route of pay-TV whilst occupying analogue TV spectrum (and having public service obligations), and being too small to compete head-on with ITV and Channel 4 from a commercial perspective.

Getting more advertisers to support Five will be a very high priority, because anything just has to be better than a complete absence of paid-for commercials during the break in Live from Studio Five which followed the Richard Desmond interview. (His newspaper connections should prove handy here.)

During his interview on Five, Desmond retracted earlier hints that he planned to “bring back Top of the Pops” – of course it’s safe to assume that the TOTP brand isn’t available to him – therefore it’s wise to consider that any so-called programming ‘pledges’ from Desmond are nothing but wishful thinking until they actually materialise on-screen.

He also talked bullishly about future attempts to acquire big name productions such as Coronation Street (in his dreams) and The X Factor (not impossible but the asking price would surely be astronomical), but interestingly he played down the suggestion of using Express-sourced showbiz ‘contacts’ such as Kerry Katona in Five’s programming.

A more risky but doable target would be to acquire The Bill from ITV now that it has lost interest in the series; it’s produced by an RTL subsidary but the actors were contracted through ITV which effectively blocked a previous attempt to snatch the series from ITV that was made by Dawn Airey when she was head of Five’s programming.

Then there’s Big Brother, but reality TV with that level of ambition certainly requires a mass audience (just ask Sky) and Channel Five arguably still isn’t quite up to the job of delivering the potential required for the format just yet, especially as Big Brother appears to be in terminal decline despite Channel 4 and Endemol’s best efforts.

(Just look at how the audience figures for the Aussie soaps have collapsed since they transferred over to Channel Five.)

However if Big Brother is still capable of delivering a reasonable chunk of the required demographic that advertisers like to have, then there’s a reasonable possibility that it could continue on Five at least in the short term until it either shows signs of recovery or collapses altogether.

Continuing Big Brother on Five would therefore carry a significant risk of killing any UK interest in the format for much longer compared to allowing the format to rest for a few years before relaunching it, and Endemol is likely to assess this risk first before agreeing any new deal with Richard Desmond (if it happens).

Also Desmond must have a deal in place with RTL to continue showing the CSI franchise (as he stated in his interview), because CSI came to Five as part of an RTL group deal, although RTL won’t have a UK presence as a broadcaster for the foreseeable future.

Indeed the big unanswered question is whether RTL will ever return to the UK as a television broadcaster, and that will almost certainly be linked to the longer term future of ITV plc; its onerous pension fund commitments being a major deterrent to any potential takeover bid but this hurdle may yet be surmountable.

Also of note is Desmond’s preference to using the name “Channel Five”; Five as a ‘brand’ may be short and snappy but is ultimately meaningless outside of media circles when most people still refer to it as Channel Five anyway, and calling it “Channel 5” is much less ambiguous as well. (Just ask Channel 4.)

So expect to see this change as part of a future rebrand, unless some highly-paid consultants successfully manage to convince (Channel) Five’s management to go against the idea.

Other stumbling blocks that face Desmond also include the bad EPG positioning for Five’s belatedly-launched digital channels such as Fiver; with hindsight, Five’s prior sub-letting of its digital terrestrial TV space to Top Up TV for a two-year deal ten years ago just has to be one of the most ill-advised business decisions made by a broadcaster in recent years.

Anyway, it’s all too easy to knock Richard Desmond for his takeover of Channel Five when considering his porn connections combined with a somewhat contradictory ownership of the reactionary Express Newspapers, but given the huge task ahead of him plenty of luck will be required – he’s certainly going to need it.

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