Viacom, the US giant behind MTV and Nickelodeon, has bought Big Brother broadcaster Channel 5 in a £450 million deal that will net a huge profit for existing owner Richard Desmond.
This is the first time a US company has bought a British public-service broadcaster. Regulator Ofcom is likely to rubber-stamp the acquisition as Viacom already broadcasts in the UK.
Toby Syfret of Enders Analysis said Viacom will need to show it can produce programming that has a mainstream appeal for Britons and it would be “a mistake” to rely on imported American shows such as Jersey Shore and SpongeBob SquarePants. “The whole service has got to have a broad national appeal,” he said.
Ofcom rules require half of Channel 5’s programming to be original UK productions and it must broadcast 260 hours of news a year. Channel 5 has a 6% share of TV viewing. The acquisition will more than triple Viacom’s share to 8.4% from 2.4%. BSkyB already sells Viacom’s TV advertising in Britain, but it is understood the US giant may not hand Channel 5’s ad sales to Sky in the near future.
Viacom president and chief executive Philippe Dauman said: “Viacom’s global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers. In addition, we will introduce our popular content to new UK audiences.”
He noted Channel 5 was the “only commercial public service broadcaster to consistently grow viewership share in recent years” and is “viewed by more than 80% of the UK population each month”.
Selling Channel 5 is a coup for Desmond, proprietor of the Daily Express and Daily Star, even though it was mooted he wanted £700 million. He bought it for £103.5 million in 2010.
Sky customer numbers surge
Sky saw a 74,000 jump in TV customers, including online subscribers to Now TV, in the last quarter. Chief executive Jeremy Darroch said analysts who had forecast its satellite TV subscribers would fall were “just wrong”.
Nine-month operating profits fell 8.5% to £910 million as Sky invested in internet-connected TV technology. Revenues leapt 6.6% to £5.67 billion. The shares rose 4% to 915.5p.
