Viacom Buys U.K. Free--air Network Channel

First U.S. media conglomerate to control a British free-to-air network

LONDON — Viacom has won the bidding for U.K. free-to-air TV net Channel 5, buying the broadcaster from entrepreneur Richard Desmond’s Northern & Shell Media Group for £450 million ($757 million).

Viacom is the first American conglom to control a free-to-air broadcaster in the U.K. It already operates 20 channels in the territory, including MTV, Nickelodeon and Comedy Central. All are pay TV channels, except Viva, which is free.

Viacom CEO Philippe Dauman: Why We Bought U.K. Broadcaster Channel 5

“The acquisition of Channel 5 accelerates Viacom’s strategy in the U.K., one of the world’s most important and valuable media markets,” said Viacom prexy and CEO Philippe Dauman.

Dauman added that Viacom “will continue to explore opportunities in the U.K., both in the free-to-air and pay television markets.”

Channel 5 acquires the majority of its content, which includes the “CSI” franchise, “The Mentalist,” “Person of Interest” and “Under the Dome,” as well as Aussie soaps “Neighbours” and “Home and Away.” It also screens a local version of “Big Brother.”

Owning the network will give Viacom a further outlet for its own content, and Dauman said Viacom would also commission British producers to supply shows for the network.

“This deal will dramatically increase Viacom’s investment in content produced in the U.K., which has a widely admired public service broadcasting culture, and a globally influential production sector,” he said. “We look forward to partnering with local producers to introduce more U.K.-created content to global audiences.”

Desmond, who paid $175 million for Channel 5 in 2010, had reportedly been seeking a price tag of some $1.17 billion, having turned it around through overhead cuts and a program grid of police dramas and reality shows.

Its main channel, Channel 5, is watched by more than 42 million viewers a month, and includes a strand for pre-school kids, Milkshake!. Its other channels are 5*, which focuses on 16- to 34-year- olds, and 5USA, which carries American programming. Channel 5’s on-demand platform, Demand 5, delivered more than 23 million views in January.

“Channel 5’s momentum is indisputable, with impactful programming, increasing popularity and a growing digital platform,” Dauman said. “Viacom’s global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers in exciting new ways.”

The 20 bidders in the four-month auction are understood to have included Discovery and Scripps from the U.S., and BSkyB and BT from the U.K.

Patrick Frater contributed to this report.

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