TV3 acquires Channel 6 for undisclosed sum

TV3 HAS bought Channel 6 for an undisclosed sum in a deal that strengthens its position in Irish broadcasting by giving it a digital sister channel and eliminating a competitor, writes Laura Slattery.

TV3's owner, private equity firm Doughty Hanson, will acquire 100 per cent of Channel 6, the only non-subscription domestic digital channel in the Republic, from its founders and investors in a deal that will form a combined entity with a rich package of television imports to its name.

Channel 6 is the Irish home for US shows such as House and Heroes. TV3 can now add these to its own programming assets, which include soaps Coronation Street and Emmerdale.

TV3 chief executive David McRedmond said he hoped to double Channel 6's audience over the next few years. The channel, which like TV3 concentrates on drama and light entertainment for the under 35s, reaches about 170,000 adults a day.

TV3 had been in negotiations to buy the channel for several months. It is estimated that a sum of €2 million to €3 million may have changed hands. However, it is likely that the deal, which is subject to Broadcasting Commission of Ireland (BCI) approval, would also have included earn-out provisions, giving Channel 6's shareholders a possible payout of €10 million to €12 million over a five- to six-year period, should TV3 turn a profit on the channel.

Channel 6 was launched in March 2006 and is understood to be loss making. Its chief executive, Michael Murphy, will remain in place and no reduction in staff numbers is expected.

Mr McRedmond told The Irish Times it was "not the largest deal, but it is a very significant one", which allowed TV3 to become a multichannel operator.

The deal will allow TV3 to match the British trend of cross-promoting a terrestrial channel with a digital one, such as the way in which Channel 4 links its schedule to its digital offshoot, E4.

"The key to this is the two schedules have to be complementary. If we're showing sport on TV3, there will have to be entertainment on Channel 6," Mr McRedmond said.

He added that "getting better acquisitions and indeed doing more Irish programming" would be top of the agenda once the deal was completed in the autumn.

TV3's programming budget has increased 50 per cent in the past 18 months. Channel 6's budget is substantially smaller and Mr McRedmond said the company would have to "to get more for it".

TV3 imports ITV reality show I'm a Celebrity . . . Get Me Out of Here! but does not broadcast its companion show, which ITV broadcasts on its digital channel, ITV2, after the main show ends.

The Channel 6 deal will allow TV3 to mirror this practice. "We need to get an Irish station doing this, otherwise we're entirely at the mercy of the UK broadcasters," Mr McRedmond said.