Channel 5 (UK) - Company

Company

Channel 5 Broadcasting Limited was licensed by the UK Government in 1995 after a bidding process that started in 1993 and lasted throughout 1994. The initial round of bidders, which included a network of city-TV stations planned by Thames Television and the Italian politician and media tycoon Silvio Berlusconi (who a few months later retired his offer), was rejected outright and the ITC contemplated not awarding the licence at all.

The difficulty with the project lay in use of television broadcast frequencies that had been allocated to RF outputs from domestic video recorders. To achieve national coverage, large numbers of domestic video recorders (which output at a nearby frequency) had to be retuned or fitted with a filter, at the bidding company's expense.

The project was revived in mid-1994 when the ITC re-advertised the franchise. Tom McGrath, then-president of Time Warner International Broadcasting, put together a revised frequency plan with NTL and consulting engineer Ellis Griffiths, involving less retuning and greater signal coverage. Lord Hollick, then chief executive of Meridian Broadcasting (later United News & Media, and UBM) took up the project as lead investor as UK law prohibited Time Warner from owning more than 25%. Pearson Television, who by now owned original licence bidders Thames Television, also came on board. When McGrath left to become President of Paramount, Time Warner dropped out of the project and was replaced by CLT (known in the UK for Radio Luxembourg). Other bidders for the license included UKTV (led by CanWest and Select TV which bid £36m for the license, New Century Television (owned by BSkyB and Granada who bid £2m) Virgin TV (backed by Virgin Communications and Associated Newspapers who bid £22m, the same as Channel 5 Broadcasting who won the license) Pearson Television and CLT later merged, becoming RTL Group who became part of Bertelsmann and, control the network, after buying UBM's 35.4% stake for £247.6 million on 20 July 2005. The acquisition was approved on 26 August 2005. After Holleck became involved, he and McGrath brought on board Greg Dyke (later Director-General of the BBC) as interim CEO during the application and launch phase of the project.

On 27 February 2004, it was reported that Five and Channel 4 were discussing a possible merger. Some comics joked that the merged company should call itself Chanel 9 after the spoof foreign network on The Fast Show. Channel 4 and Five announced in November of that year that merger plans were being called off. Early in 2009, rumours started re-surfacing about Five, Channel 4 and ITV conducting a three-way merger.

Five was taken over by Richard Desmond's publishing group Northern & Shell on 23 July 2010 for £103.5 million. Desmond pledged to top up the broadcaster's total budget to about £1.5bn over the next five years, including new investment of £50m to £100m a year to boost programming and the equivalent of £20m promoting the channel and its shows in a marketing campaign in Northern & Shell publications. The takeover was partly motivated by the opportunities for cross-promotion of Five from Desmond's newspapers (Daily Express and Daily Star) and magazines (including OK!). One commentator warned that "readers will be bombarded with references to Five. The opportunity for cross-promotion between his publications and TV channel are enormous."