British government favours Channel 4's merger with BBC

The British government appeared to throw its weight behind a proposed partnership between Channel 4 and the commercial arm of the BBC on Thursday and said it would make a decision within weeks. This proposal seems to be finding favour over options such as a merger with Channel Five or "top-slicing" part of the BBC's licence fee.

Speaking at the Oxford Media Convention, media secretary Andy Burnham said Channel 4 was here to stay and it would make sense to look first at a partnership with a public service body.

The media regulator said in a report on Wednesday that Channel 4 could form partnerships with BBC Worldwide or merge with RTL-owned AUDK.LU Five as the broadcaster battles falling advertising revenues and structural changes in the industry. Channel 4, which is publicly owned but funded by advertising, has said it could be running an annual loss of £150 million a year by 2012.

BBC Worldwide is the commercial arm of the BBC that exploits the corporation's content through magazines such as Top Gear and the Radio Times and sells programme formats such as Strictly Come Dancing abroad.

"The Channel 4 brand for viewers is here to stay," Burnham told the audience. "There are still many options as to what this might look like. It makes sense to begin by looking at public sector bodies -- Channel 4 and BBC Worldwide. Of course it is early days, and any successful partnership model needs to continue to meet the needs of the BBC as well as releasing value and resource to create a new model with Channel 4."

He said there was an argument that a fourth principle should be added to Lord Reith's existing three that guide the BBC - to educate, inform and entertain - with "enable". "Seriously is it time to add a fourth [Reithian goal] to put partnership into the BBC?" he asked. "Should the BBC be a supporting hand under others rather than build itself ever bigger?"