ITV's Crozier 'considers Five takeover'

ITV is reportedly considering a shock takeover of Five as part of a fresh strategy being developed by new chief executive Adam Crozier.

Crozier, who started his reign at ITV today, is thought to view consolidation as inevitable in the UK television industry as advertising revenues face long-term decline, reports The Times.

Five and ITV have previously held negotiations over establishing greater links between the two broadcasters, but nothing has materialised.

Should ITV forge ahead with its Five takeover, it would gain an additional 8% of the UK advertising market, but also crucially cut operating costs by around £100m.

However, such a deal would no doubt face competition concerns as the new ITV group would control over half the TV advertising market, which is expected to grow by 10% year-on-year in 2010.

Five-owner RTL Group reported in March that the UK broadcaster made a loss of €41m (£35m) last year as its revenues fell 30% year-on-year to €303m.

RTL chief executive Gerhard Zeiler subsequently claimed that Five's future value rests as an asset in the expected consolidation of the UK television industry.

However, Zeiler is thought to prefer the idea of firming up a long-mooted merger with Channel 4 rather than a tie-up with ITV.

Zeiler even met Channel 4 chairman Terry Burns and incoming chief executive David Abraham last month to discuss possible options for a deal.

Industry sources also expressed doubt over the weekend that a Five takeover by ITV is an imminent prospect.

They instead believe that Crozier's new strategy will involve re-focusing ITV's production operation to produce more hit programmes for sale around the world.