Channel 4 resists privatisation and publishes ‘new vision’ for its future

Channel 4 has refused to accept the Government’s plans for privatisation and unveiled an ambitious counter-proposal that would allow it to remain under public ownership.

By Nathan Hyde
Thursday, 5th May 2022, 12:19 pm

Chief executive Alex Mahon said the broadcaster has presented “an attractive, realistic and sustainable solution” to the Government, which would secure its long-term future.

Under the plan, called ‘4: The Next Episode’, Channel 4 plans to bring in £1bn of investment by 2030, by setting up a joint venture that will bring in an external investor as majority shareholder and allow the broadcaster to borrow more money.

It has promised to support the Government’s levelling up agenda, by doubling the number of roles that are relocated outside London to 600 and spending 50 per cent of its commissioning budget outside the capital.

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The Government announced last month it is pressing ahead with plans to privatise Channel 4

It has also pledged to invest £100m in training over the next 10 years, to help around 100,000 young people from a range of backgrounds break into creative industries, and "dramatically expand" Channel 4’s Leeds-based digital content production studio, 4Studio.

The Government published a white paper last month which said privatisation will give Channel 4 “the tools it needs to succeed in the future as a public service broadcaster” and compete in a challenging market with streaming giants like Netflix and Amazon, while spending on traditional TV advertising continues to fall.

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It said that under public ownership, the broadcaster has limited ability to borrow or raise capital by issuing shares and its set-up “effectively stops it from making its own content”, as it is heavily reliant on advertising revenue.

Chief executive Alex Mahon said the broadcaster has presented “an attractive, realistic and sustainable solution” to the Government

Through privatisation, Channel 4 would have access to capital and the freedom to make its own content, allowing it to diversify its revenue stream, the proposal added.

But Ms Mahon warned the Government’s plan will “have a major impact on the television landscape”, as it would abolish the model which ensures Channel 4 buys all of its programming from independent production companies and this could see the sector lose around £320m a year.

She also said the white paper does not require Channel 4 to maintain "any presence” in Leeds, Bristol, Glasgow or Manchester and it stated that only 35 per cent of the broadcaster’s commissioning budget should be spent outside London, even though it has already committed to 50 per cent.

Speaking at a press conference this morning, she said Channel 4’s counter-proposal was discussed with the Government, before it decided to press ahead with privatisation in April.

"We did discuss them in detail with Government and clearly it's not the choice they made. I think that's disappointing and a shame for the UK creative industry," she said.

However, she is now optimistic it will gain public support, after 96 per cent of the 55,737 people who took part in a recent Government consultation said they did not think privatisation was necessary.

“There's plenty of evidence that this is not what the public wants and it's not what the industry wants,” she said.

“We developed a new vision, 4: The Next Episode, which represents our vision of what more Channel 4 can be and can do, while continuing to be owned by the British people.”

“The vision is focused around ensuring that Channel 4 could deliver more value to the British public, building on our strengths and evolving Channel 4 for the long term, to make an even greater and more significant contribution to the UK creative industries, to the economy, and to UK society.”

Ms Mahon said the plan will allow Channel 4 to build on its recent success, as it generated record revenue of £1.2bn last year – with a £100m surplus – and saw a 21 per cent increase in viewing on its highly-profitable streaming platform, All 4.