Bargain basement is no place for UK's best media labels

A visit to the bargain-priced designer outlet TK Maxx ('get the look and the labels') will tell you much of what you need to know about a portion of the UK population, writes Ian Darby.

It's full of people who don't seem to see the irony in buying designer gear in an environment that appears to me to more closely resemble a bus depot than a clean, fragrant store.

Personally, I prefer a more honest approach to the bargain retail experience. It was Fosters menswear when I was a child and these days it's Primark for socks and H&M or Uniqlo for everything else.

This might be relevant because two of the UK's most loved "designer" media brands are facing such bargain-rail treatment. Richard Desmond's eyeing up of the Telegraph Group could well become a full, sweaty two-handed grope now that Conrad Black's proposed sale to the Barclay brothers has been blocked. Observers assume that, if successful in his bid, Desmond would strip out costs, tinker with editorial and generally strip away the title's silk to replace it with muslin.

More surprisingly, it has emerged that Channel 4, a broadcaster with a desirable, if dwindling, audience, has held early talks on merging with the rival broadcaster Five.

Surprising because it's easier to see a surface synergy between Five and Sky, which Five's deputy chief executive Nick Milligan is jumping ship to join, and because Channel 4 would need to be granted a change in legislation, taking up to two years, to allow it to do a deal with a commercial rival.

Apparently, a full merger was just one of the options discussed by Channel 4's chief executive Mark Thompson and Five's shareholders, United Business Media and RTL, when they met before Christmas. A merger of sales operations was the starting point for discussions.

Already critics have suggested that any merger or co-operation with five would be bad for Channel 4, a selling-out of its original public service values and an inevitable move downmarket.

Talk of a full merger may be premature. Channel 4 is indicating that it needs to consider its future funding formula but there are no guarantees that its status will be changed. However, close co-operation or a merger with five might not be the clash of opposites some suppose.

A sales merger would bring cost benefits and Channel 4's share of total audience is falling while five struggles to build share on a small programming budget of £170m. As long as any merged entity maintained two very distinct schedules rather than muddying the offerings, it could work.

For what it's worth, I don't expect a full merger to happen soon but it would be a mistake to assume that a Channel 4/Five merger would automatically create a bargain basement monster.

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