British broadcaster Channel 5 will keep its commitment to commissioning a “wide range” of UK-originated productions following the merger between Viacom and CBS – a move that has satisfied regulator Ofcom.
The British regulator has concluded that the change in ownership of the network “would not have a prejudicial effect” on C5 after reviewing its licence agreement.
The body investigated if the $30B merger would have any material impact on the broadcaster under the rules set out in the 2003 Communications Act but was satisfied that as Viacom and CBS are currently controlled by the same owners, the merger does not change who controls the licence.
Ofcom was notified of the merger on September 10 and David Lynn, President and CEO of Viacom International Media Networks, wrote to the regular on November 12 to explain the extent to which the proposed merger is anticipated to impact on the Channel 5 licence.
He wrote, “It has recently been announced that following the Transaction I will oversee the combined company’s international media networks, including Channel 5. I am therefore able to assure you that my UK team will maintain the same degree of control over programming and investment strategy for Channel 5 as prior to the transaction, and the same level of commitment to investing in a wide range of UK-originated productions.”
“We think the ownership and executive leadership of the new entity are relevant factors to the future of Channel 5, as these may affect the investment strategy and future commissioning decisions,” Ofcom added. “It appears to us that the transaction has a strategic and commercial rationale which is not to do with Channel 5 and therefore would be unlikely to affect its strategic direction directly.”
Viacom and CBS expect to close the all-stock transaction after the close of trading on December 4. On the next day, December 5, the companies will become a single entity, ViacomCBS Inc.