LONDON: State-owned Channel Four, Britain's penurious second-string public service broadcaster, has frozen all staff salaries for the current year – including those of its most senior executives, ceo Andy Duncan and director of television Kevin Lygo. The duo also waived their right to current year performance bonuses.

These 'sacrifices' are a tactical necessity if Channel 4 is to be hooked out of trouble by the UK government, whose preferred option is said to be a melding of C4's programming core with components of the BBC's commercial unit, BBC Worldwide.

The option is known in governmental and regulatory circles as 'PSB2'.

But insiders infer that the aggregated numbers do not support a BBCWW / C4 combo, increasing the chances of C4's nightmare scenario – a forced merger with the UK's fifth terrestrial channel, RTL Group's lame duck, Five.

But according to the Financial Times, "there is at least one, and possibly two other businesses that have expressed an interest in joining forces in a PSB 2".

Either contender might unite with C4 to form a public-service broadcaster centred on the latter's programming, the resultant hybrid commanding the financial and creative clout to provide an alternative to the BBC as a creator of programmes of cultural or social benefit.

The industry has until March 12 to report its recommendations to communications minister Lord Stephen Carter, the former Ofcom ceo and policy wonk who heads the government drive to stabilise the PSB framework.

Data sourced from Financial Times; additional content by WARC staff