4Digital shareholders divide over merger with Digital One

Amid concerns over whether there is sufficient demand for the digital radio channel slots provided across both multiplexes, 4Digital Group chairman Nathalie Schwarz and Ashley Tabor, chief executive of Digital One majority shareholder GCap Media, have been in talks over an as-yet-unspecified combination of the two platforms.

It is understood that at the most recent 4Digital Group board meeting, held on 4 July, Schwarz said that Tabor was expected to deliver an offer over a tie-up between both multiplexes at some point this week.

However, certain shareholders hold conflicting views as to which option - a merger or the continued operation of separate platforms - would be most profitable and preferable.
4Digital Group shareholders comprise Channel 4, H Bauer, UBC Media Group, The Carphone Warehouse, UTV Radio and Sky.

A source close to the board said: "From day one, all the shareholders have had different interests. Some are in it for the money alone, while others are providing new services, which they obviously need to turn a profit from too."

4Digital Group was due to launch its first station, E4 Radio - a youth-oriented channel with content from TV shows such as Big Brother and Skins - this summer. However, that timetable has been axed and no new launch date has been set.

Schwarz is believed to have confirmed to the 4Digital Group board that Ofcom has given it until the end of August to update it with its launch plan. The group has yet to sign a transmission contract with Arqiva and is understood to be continuing negotiations over the contract terms.

Ofcom is thought to have imposed the August deadline because it will take around one year to build out 4Digital Group's transmission infrastructure. Commencing such work any later than August would place 4Digital Group at risk of missing Ofcom's  deadline to launch its multiplex by July 2009.

Channel 4 and Ofcom declined to comment.

This article was first published on Media Week