C4 'seeks to avoid Five merger'

Channel 4 would be prepared to make significant cuts to its output instead of merging with Five, it has emerged.

Chief executive Andy Duncan told the Financial Times that the option of cutting programming to achieve cost savings had always been on the table.

"Channel 4 is a viable ongoing organisation because we can continue to cut our cloth," he told the paper. "There is a significant trade-off, which is how much public value we are generating if we do [cut programming], and how much we are doing in terms of creative value. But people confuse that with some possibility of Channel 4 going bust, and it is very different."

Channel 4 is projecting that it will face a funding gap of £150m per year by 2012. The suggestion that it merge with Five was raised in January by BBC director general Mark Thompson, and gained traction after senior executives from Five parent company RTL came out in support.

The interim version of communications minister Lord Carter's Digital Britain report put forward a plan for the creation of "a long-term and sustainable public service organisation" designed to compete with the BBC, possibly by blending the assets of Channel 4 with certain assets of BBC Worldwide, such as its 50% stake in UKTV. However, two parliamentary committees in two days have scorned such a proposal; yesterday, the Commons culture, media and sport select committee rejected a merger between the two broadcasters, and today, the Lords communications select committee dismissed it as "corporate engineering".