The government will proceed with plans to privatize Channel 4.
Here you will find answers to some of the most important questions about the decision.
Why does the government want to privatize the station?
The government has argued that Channel 4’s long-term future must be secured amid concerns about its survival in the streaming age.
Channel 4 is rightly a cherished place in British life and I want it to stay that way. I’ve come to the conclusion that government ownership prevents Channel 4 from competing with streaming giants like Netflix and Amazon. 1/3
— Nadine Dorries (@NadineDorries) April 4, 2022
A statement from the Department for Digital, Culture, Media and Sport (DCMS) said it made the decision to allow the channel “to thrive in the face of a rapidly changing media landscape,” while a government source said the move would ” Remove Channel 4’s Straitjacket”.
Culture Secretary Nadine Dorries tweeted that she wanted the channel to remain a “cherished place in British life” but felt state ownership “prevents Channel 4 from competing against streaming giants like Netflix and Amazon “.
She said: “I will try to reinvest the proceeds from the sale to improve the creative sector, put money into independent production and creative skills in priority parts of the country – and deliver a creative dividend for all.”
The government source told the PA news agency: “C4 is a great company with a strong brand built on being creative, innovative and distinctive, but a change of ownership will remove its straightjacket and give C4 the freedom to innovate and to grow so it can thrive and thrive long into the future and support the whole of the UK creative industries.”
The government has also argued that a sale could allow the broadcaster, which has limited ability to borrow money or raise private sector capital to invest in new platforms and products, and not own its own content and can sell to set up their own production house and produce their own intellectual property.
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What is the current model?
Channel 4, established in 1982 to reach underserved audiences, is currently government-owned.
It’s funded by advertising, not taxpayers.
What has happened so far?
Ministers launched a public consultation on a possible change of ownership of the channel last July and Ms Dorries has processed 60,000 responses to the consultation.
The government informed the broadcaster on Monday of the decision to proceed with the sale. It comes after years of arguments between the two sides.
What’s happening now?
The DCMS said further details would be announced “soon”.
Channel 4 CEO Alex Mahon said “there will now be a long process ahead”, writing in an internal email to staff on Monday that it could take 18 months or more for the necessary legislation to pass the House of Commons and then pass the lords.
“During this time we will continue to work with DCMS and the Government, and with our supporters across the industry, to make the case to ensure Channel 4 can continue to deliver on its mission,” she said.
Plans for the sale will reportedly be set out in a white paper later in April and will be included in a new spring 2023 media bill.
Bids for the channel are expected to come in next year to complete the sale in early 2024, ahead of the next general election, which is expected no later than May this year, the Daily Telegraph reported.
How did Channel 4 react?
It is disappointing that today’s announcement has been made without formal acknowledgment of the significant public interest concerns that have been raisedChannel 4 announcer
A Channel 4 spokesman said he was “disappointed” with the decision but would “continue to engage” with the government in the process to “ensure Channel 4 continues to play its unique role in the creative ecology and national life of the UK plays”.
The channel explained that it is presenting the government with an alternative to privatization that would “ensure its future financial stability” and allow it to do more for the public, creative industries and the economy.
Ms Mahon also said in the internal email to staff that they had proposed a “vision for the next 40 years” based on “continued public ownership” and “built on the tremendous public value this model has delivered to date.” delivered and the opportunity to deliver so much more in the future.”
However, she added that ultimate ownership of the channel rested with “Government to propose and Parliament to decide” and that her priority now was “to look after you all and the wonderful spirit of Channel 4”.
The broadcaster said it will continue to work with the government throughout the legislative process and plans to do everything it can to “ensure Channel 4 continues to play its unique role in the creative ecology and national life of Britain”.
What have other critics of the move said?
The Thick Of It creator Armando Iannucci tweeted, “They asked for ‘a debate’; 90% of the posts in this debate said it was a bad idea. But they go ahead anyway. Why do they want to belittle the great British television industry? Why? It makes no business, economic or even patriotic sense.”
It’s A Sin writer Russell T Davies previously said the privatization of Channel 4 was a “great crime” that would result in programs like his hit series not being produced.
Tory MP Sir Peter Bottomley said he opposed privatization as he felt it was “bad for television diversity, bad for viewers and bad for independent producers”.
They asked for a “debate”; 90% of the posts in this debate said it was a bad idea. But they go ahead anyway. Why do they want to belittle the great British television industry? Why? It makes no business, economic, or even patriotic sense. https://t.co/aokG0yZPlm
— Armando Iannucci (@Aiannucci) April 4, 2022
Philippa Childs, Chair of the Broadcasting, Entertainment, Communications and Theater Union, called the move a “short-sighted sale of an incredible British asset”.
What did the advocates of the sale say?
Baron Grade of Yarmouth, who was the channel’s chief executive between 1988 and 1997, has said that “the status quo is not an option” and that his current mandate is like a “straitjacket” in today’s media landscape.
He told the House of Lords Communications and Digital Committee last October: “Channel 4 needs to do what every other free-to-air, advertiser-backed company does, which is own its own IP and be able to scale to win.
“Everything in Channel 4’s constitution is against it at the moment and so I think it’s going to start really struggling in a very short time.”
Who could buy Channel 4?
Foreign ownership was reportedly not excluded as long as property regulator Ofcom’s ‘Fit and Proper’ test was passed.
The Telegraph reported that ITV was said to be interested while Discovery had held informal talks and Rupert Murdoch had been linked with a potential takeover. Bids from Sky, Channel 5 owner Paramount, Amazon and Netflix are also possible.
A government source told the newspaper that ministers expect “a lot of interest in buying C4 from a number of serious buyers who want to build on C4’s strengths and help unlock its full potential”.
How much could it sell for?
The government has yet to set a price tag, but reports suggest the channel could sell for as much as £1billion.
Ministers have announced that they will try to reinvest the proceeds in the creative industries.
https://www.independent.ie/entertainment/a-closer-look-at-the-governments-plans-to-privatise-channel-4-41521061.html A closer look at the government’s plans to privatize Channel 4