@ FT Digital Media: Channel 4’s Andy Duncan Fights Back, Snubs BSkyB Offer

image Don’t expect an unlikely partnership between BSkyB (NYSE: BSY) and Channel 4 any time soon. C4 CEO Andy Duncan has issued a stiff rejection of the company’s offer to house its digital TV channels in a pay-TV JV mirroring BBC Worldwide’s partnership with Virgin Media (NSDQ: VMED). Earlier today, Sky CEO Jeremy Darroch told the FT Digital Media conference that a pay TV model for the publicly owned C4, in partnership with Sky, would deliver value to viewers — but the offer was not warmly received. Duncan told the same conference later on that his number-one goal was a merger with BBC Worldwide, as outlined in Lord Carter’s Digital Britain interim report. C4 is talking to other potential partners, but Duncan added: “There is no advantage in us merging with a structurally challenged commercial business simply to prop up someone else’s profits and shareholder dividend.

Channel 4 is not going out of business, Duncan says, and could even survive on its own: The company had a 25-percent share of commercial TV advertising last year and had nearly 13 percent of prime-time viewing. That’s why he’s so peeved by BSkyB’s assertion, set out in a letter from Rupert Murdoch Sky (via Guardian.co.uk), that C4 wasted £270 million on “unprofitable non-core commercial activities” in recent years (Duncan says the numbers are “inaccurate”). Money spent on its digital channels such as More 4, 4Music and E4 wasn’t wasted: he says they have increased C4’s viewing share by a third since ditching their subscription model and now contribute “tens of millions of pounds” a year in revenue. More after the jump…

Digital defence: Murdoch’s Sky’s letter blasted C4 for losing money on its 4Digital radio misadventure and the defeated Kangaroo VOD project but Duncan says it only lost “a few million pounds” on each. Duncan fought his corner on the digital-only projects C4 has invested in: he says 4OD served up 250,000 programmes so far and he claims the broadcaster was the world’s first to put its entire output online in full, for free. C4’s start-up investment project 4iP is “the most significant media investment project in this period”.

Cuts: Duncan is taking a voluntary salary cut of 35 percent while director of TV Kevin Lygo will take a 25 percent cut. Both are waiving their bonuses of up to 30 percent of their salaries due to pressures on the companies finances, reports Guardian.co.uk.