Channel 5 Broadcasting Limited was licensed by the UK's then-independent statutory regulator the Independent Television Commission (ITC) in 1995 after a bidding process that started in 1993 and lasted throughout 1994.

The initial round of bidders, which included a network of Citytv stations planned by Thames Television and the Italian politician and media tycoon Silvio Berlusconi[2][3] (who founded MFE - MediaForEurope, which owns Canale 5 and formerly owned La Cinq, which ceased operations in 1992; he retired his offer a few months later),[4] was rejected outright and the ITC contemplated not awarding the licence at all.

The difficulty with the project lay in use of television broadcast frequencies that had been allocated to RF outputs from domestic videocassette recorders.

To achieve national coverage, large numbers of domestic video recorders (which output at a nearby frequency) had to be retuned or fitted with a filter, at the bidding company's expense.

Tom McGrath, then-president of Time Warner International Broadcasting, put together a revised frequency plan with NTL and consulting engineer Ellis Griffiths, involving less retuning and greater signal coverage.

Lord Hollick, then chief executive of Meridian Broadcasting (later United News & Media, and UBM) took up the project as lead investor as UK law prohibited Time Warner from owning more than 25%.

After Holleck became involved, he and McGrath brought on board Greg Dyke (later Director-General of the BBC) as interim CEO during the application and launch phase of the project.

On 11 February 2016, Channel 5 also unveiled an overhauled brand, meant to reflect a new remit of "Spirited TV with an Emotional Heart".

[31] As there could have been the situation where a premium pay streaming service with the Paramount name was operating in a marketplace where there was a free-to-air Paramount television channel offering emergency service reality TV shows, wrestling and action B-movies, it was decided to rename the channel (which had previously merged with 5Spike) as 5Action,[32] with the change due to take place on 19 January 2022.