C4 close to Worldwide deal as landmark report looms

BBC expected to agree joint venture to secure C4's future 'within days'

Channel 4 and BBC Worldwide are locked in last-minute talks over the fine print of a joint venture that would transform the broadcaster's parlous finances but ministers have set a deadline of less than a fortnight for the plan to be sealed.

They are believed to be within days of signing an agreement that would secure C4's future, though insiders warned that there were still sticking points to overcome before an agreement is reached.

A source close to the talks said: "We are in the final throes of the negotiations. The two sides are getting closer and closer; there is a deal in outline." C4 and BBC Worldwide declined to comment.

It is understood that senior executives from C4 and Worldwide are meeting on a daily basis, and sometimes several times a day, as they look to hammer out an agreement.

Regulators first mooted the tie-up last year to solve C4's financial woes; the broadcaster said it faces a funding gap of £150m by 2012.

The ultimate decision over C4's future rests with the Government, but it is understood that this joint venture is the preferred option. Andy Burnham, the Secretary of State for Culture, Media and Sport, said he favoured the Worldwide joint venture in January

If the talks collapse, which insiders admit is still a possibility, C4 is likely to be forced into the arms of rival broadcaster Five, a move that chief executive Andy Duncan has repeatedly rejected as making "no sense".

While there is no official deadline for an agreement between C4 and Worldwide, Stephen Carter, the Communications minister, is expecting to announce the outcome when his Digital Britain report is published on 16 June. A spokesman for the Department for Culture, Media and Sport (DCMS) said: "There is the expectation that C4 and Worldwide will come to a sort of conclusion by the release of the Digital Britain report." C4 and Worldwide hope to have a draft memorandum of understanding in place in time for inclusion.

Digital Britain is a landmark report from the DCMS and the Department for Business, Enterprise & Regulatory Reform, spearheaded by Lord Carter.

The source close to the talks said: "There is a lot of pressure. It has to be secured in the next few days, otherwise the Government could look at other options. We are in the last window for a deal to be agreed.

"There is no guarantee it will happen, but it has reached a stage when it will be awkward for both sides if the talks fall apart," the insider added.

C4 is desperate to generate more revenues to support its commercial model. Its chairman, Luke Johnson, said recently that the broadcaster could carry on without the extra funding but it would cause "death by a thousand cuts".

C4 has been devastated by the collapse in advertising revenues around the world. It managed to post a £1.8m surplus last year after cutting budgets and jobs to make up for the fall in revenues. The company warned that it could have to cut a further £75m out of its commissioning budget this year.

The joint venture is expected to generate a profit of about £200m, Worldwide's chief executive, John Smith, told the House of Lords' Communications Committee last month.

Among the assets included will be Worldwide's 50 per cent stake in UKTV pay channels, which include Dave and Watch, as well as its 60 per cent stake in Entertain, the music and DVD publishing group.

Mr Smith said the venture would "take account of things they are very good at and the things that we are good at and put them together in a new venture," but added that a full merger would not be a good idea.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Loren Hughes: Financial Accountant

£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Sheridan Maine: Financial Accountant

£150 - £190 Daily Rate: Sheridan Maine: One of London's leading water supplier...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor