Channel 4 will be sold off by the Government for at least £1billion before the next election 

934

View
comments

Channel 4 will be sold off by the Government for at least £1billion before the next election in the biggest privatisation in nine years. 

The channel is currently owned by the Government and receives its funding from advertising.  

C4’s biggest shows include The Great British Bake Off, Gogglebox, Hollyoaks and Big Fat Quiz.

A spokesperson for Channel 4 said it was ‘disappointed’ with the decision but would ‘continue to engage’ with the Government on the process to ‘ensure that Channel 4 continues to play its unique part in Britain’s creative ecology and national life’.

The statement said: ‘With over 60,000 submissions to the Government’s public consultation, it is disappointing that today’s announcement has been made without formally recognising the significant public interest concerns which have been raised.

‘Channel 4 has engaged in good faith with the Government throughout the consultation process, demonstrating how it can continue to commission much-loved programmes from the independent sector across the UK that represent and celebrate every aspect of British life as well as increase its contribution to society, while maintaining ownership by the public.

‘Recently, Channel 4 presented DCMS with a real alternative to privatisation that would safeguard its future financial stability, allowing it to do significantly more for the British public, the creative industries and the economy, particularly outside London. 

‘This is particularly important given that the organisation is only two years into a significant commitment to drive up its impact in the UK’s Nations and Regions.’

It continued: ‘Channel 4 remains legally committed to its unique public-service remit. The focus for the organisation will be on how we can ensure we deliver the remit to both our viewers and the British creative economy across the whole of the UK.

‘The proposal to privatise Channel 4 will require a lengthy legislative process and political debate. We will of course continue to engage with DCMS, Government and Parliament, and do everything we can to ensure that Channel 4 continues to play its unique part in Britain’s creative ecology and national life.’

Channel 4 chief executive Alex Mahon previously questioned the ‘logic’ behind such a move and whether privatising the broadcaster would help with efforts to ‘level up’ outside of London.

In an internal email to staff, she said her priority was to ‘look after all of you and the wonderful Channel 4 spirit’.

She also implied that the channel’s current leadership would not go down without a fight saying ‘ultimately the ownership of C4 is for Government to propose and Parliament to decide’.

She said: ‘In our engagement with Government during its extended period of reflection, we have proposed a vision for the next 40 years which we are confident would allow us to build on the successes of the first 40.

‘That vision was rooted in continued public ownership, and was built upon the huge amount of public value this model has delivered to date and the opportunity to deliver so much more in the future.

‘But ultimately the ownership of C4 is for Government to propose and Parliament to decide.

‘Our job is to deliver what Parliament tasks us to do, and if or when that changes, then I am confident that this incredible organisation will respond with the relentless energy it has always displayed in pursuit of its goals and the remit.

‘My priority now, along with the rest of the Exec team, is to look after all of you and the wonderful Channel 4 spirit, and make sure we all carry on doing what we do best – making incredible shows for our audiences, creating opportunities for young people and supporting the creative industry across the UK.

‘There will now be a long process ahead – it could take 18 months or more for the required legislation to go through the House of Commons and then Lords. 

‘During that time, we’ll continue to work with DCMS and Government, and with our supporters across the industry to make the arguments to ensure that Channel 4 can continue to deliver its remit.’

The Government has been consulting on plans to privatise the broadcaster, which was founded in 1982 to deliver to under-served audiences, following concerns for its survival in the streaming era. 

Ministers think that government ownership of Channel 4 is ‘holding it back’ and that privatising the broadcaster would ‘remove its straitjacket’, a Government source has said.

‘HMG is expected to pursue a sale of C4 as part of a package of reforms to modernise and sustain the UK’s public service broadcasting sector,’ the source said.  

‘Following a consultation, ministers have decided that, although C4 as a business is currently performing well, government ownership is holding it back in the face of a rapidly changing and competitive media landscape.

‘C4 is a great business with a strong brand built around it being creative, innovative and distinctive but a change of ownership will remove its straitjacket, giving C4 the freedom to innovate and grow so it can flourish and thrive long into the future and support the whole of the UK creative industries.

‘Ministers will seek to reinvest the proceeds of the sale. They want to use the cash resulting from the sale to spend on a ‘creative dividend’ – putting money into independent production and levelling up wider creative skills in priority parts of the country.

‘C4 will remain a public service broadcaster – just like ITV is a privately owned PSB (public service broadcaster) – and we will ensure it continues to make an important social, economic and cultural contribution to the UK. Importantly, this will include an ongoing commitment to prime time news.’

Last year, a report has said the Government should have waited to consult on the future of Channel 4 until they had set out a vision for public service broadcasting.

A report by the House of Lords Communications and Digital Committee said the Government did not ‘take the right approach’ when they declared privatisation was their preferred option.

Lord Gilbert, chairman of the committee, said: ‘It is difficult to reach a conclusive view on the ownership of Channel 4 without understanding the future public service broadcasting landscape.’

The report, entitled The Future Of Channel 4, said the debate about the future of the TV broadcaster has been ‘a binary one’ between privatisation and the status quo.

‘It should instead start by establishing our ambitions for Channel 4 before considering how best they can be realised,’ the report said.

The committee said both risks and opportunities must be ‘weighed up’, with much depending on how willing the Government is to protect Channel 4’s public service remit and its contribution to the creative industries as part of any potential sale.

The committee was reportedly ‘surprised’ that in both written and oral evidence, when asked to describe any potential benefits of privatisation along with potential risks, Channel 4 Corporation (C4C) ‘described only risks’.

Lord Gilbert said: ‘We welcome the Government’s and Channel 4’s sincerity in seeking the strongest future for the brand. However, the board of Channel 4 should be open to all possibilities for achieving this, including privatisation.

‘Likewise, it would be remiss of the Government not to consider possible reforms which might make Channel 4 more sustainable without a change of ownership.’

The report added that privatisation’s main benefit would be increased investment in programming, content partnerships and technology through access to capital, enabling Channel 4 to diversify its revenues, enhance its sustainability and be more ambitious internationally.

However, privatisation is not the only way in which Channel 4 could access capital, the report added.

The committee recommends that, regardless of ownership, Channel 4’s role in supporting small, medium, diverse and regional production companies should be strengthened, while ensuring that the interests of large, established production companies do not take precedence over the channel’s sustainability.

Lord Gilbert added: ‘The Government’s upcoming White Paper must justify its decision on Channel 4’s ownership in relation to a clear and compelling vision for the future of public service broadcasting.’

White papers are policy documents produced by the Government that set out their proposals for future legislation, and may include a draft version of a Bill that is being planned.