On the face of it it’s a curious deal: the decision by the distributors and producers of Neighbours to lift the price of the program so high that even the cash-rich BBC was forced to drop out of the bidding for a new contract.

Neighbours is moving from the BBC in the UK in a very expensive deal, to the newest of the commercial TV Networks called Five (the old channel Five) and no wonder.

The BBC was paying around $60,100 an ep under a deal with Fremantlemedia, but the new deal demanded it pay more than $168,000 an ep; or around $721 million over eight years.

But when you consider the common ownership of the producer distributor, Fremantlemedia and the winner of the beauty parade, the Five Network in the UK, you have to wonder about the whole transaction and whether it wasn’t a set-up.

Both are owned by the very powerful European broadcasting giant, RTL, which in turn is owned by an even more powerful European media giant, the family-controlled Bertlesmann group of Germany.

The value of the deal is reported at around $721 million over eight years but given the common ownership you have to wonder if this is in fact a subsidy to Five to give it a cost and ratings advantage over its UK commercial rivals, ITV and Channel Four.

ITV was looking set to win Neighbours away from the BBC with a bid of up to $100,000 an episode but reportedly the online and other new media rights couldn’t be agreed upon.

Channel Four was sniffing around, but the prices were obviously too rich, so that left RTL/Bertlesmann stablemate Five as the last possible buyer standing after the BBC said no go last week.

Five’s main channel and its digital channel, Five Life, will start showing Neighbours when it finishes on the BBC in 2008.

Australia’s Ten Network says the UK changes won’t affect its screeenings of Neighbours in Australia. The Network has a separate deal with Fremantlemedia. But there will be significant changes to the appearance, scripts, cast and overall production of the program here to try and boost audiences.

The soap was watched twice a day on the BBC and in the late 1980’s and 90’s when Kylie Minogue and Jason Donovan were stars and the audience peaked at around 18 million. It is now around five million a day and to a commercial TV network will offer a huge advantage over its others in getting viewers in the valuable 16 to 39 group to watch, especially young women.

But you have to marvel at the way the various arms of the Bertlesmann Empire worked this deal.