May 012014
 

UK media entrepreneur Richard Desmond will announce the sale of Channel 5 to the US broadcaster Viacom for £450 million (€546 million) later today.

US media group Viacom, which owns channels including MTV, Nickelodeon and Comedy Central, is expected to announce the deal on Thursday when it reports its latest financial results, according to The Guardian.

Bloomberg also reports that Viacom has agreed to buy Channel 5, quoting a person with knowledge of the situation who asked not to be named because the deal hasn’t been announced.

Reports suggest that the UK’s fifth terrestrial network could sell for £450 million, less than the £700 million price tag originally reported in the media, but still more than the £103.5 million current owner Richard Desmond paid for the broadcaster in 2010, when it was bought from German broadcaster RTL.

Should the sale occur, it would give Viacom a big boost in the UK free-to-air TV market. Channel 5 operates three offshoot channels: 5*, 5USA and Channel 5+24, in addition to +1 hour timeshift channels for Channel 5 and 5USA.

On Freeview, Channel 5 has five valuable slots: one ‘universal’ or near full coverage slot for its main service (which is linked to its licence as the fifth national terrestrial broadcaster – recently extended into the next decade), plus four on the commercial multiplex SDN, which can reach around 90% of UK households. Freeview carriage will usually cost a broadcaster several million pounds a year for a single slot, although much less than the £10 million+ paid for slots in the mid-00s.

Viacom has just one Freeview slot of its own for VIVA (UK), which showcases content from MTV, VH-1, Nickelodeon and Comedy Central. Viacom’s main UK channels are also carried via pay TV streamed service VuTV on channel 238.

It is not clear what Viacom will do with Channel 5’s £350m-a-year TV ad sales business. But it is thought likely that it will involve Rupert Murdoch’s Sky.

BSkyB handles the TV ad sales in the UK for Viacom – the US broadcaster is Sky Media’s biggest customer – and it is most likely to incorporate Channel 5’s sales into its existing deal.

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