Channel 4 presents an alternative plan for privatization after the white paper

Channel 4 has outlined its alternative privatization plan after the government announced its intention to take the channel out of public ownership.

Suggestions include a “leveling” to make it more “northern” with the majority of the workforce based outside of London.

About 300 positions are already based outside of London and under the new plan the number would increase to 600 by 2025.

Channel 4 chief executive Alex Mahon said they had been “active” in the consultation with the government, adding: “We also recognize that standing still is not an option in this ever-changing world. We are absolutely not here to protect the status quo or an anachronistic institution.”

She warned that the government’s plans could potentially have “a big impact on the television landscape, where things are made, who makes them, what gets funded and where people work”.


Channel 4 CEO Alex Mahon attends The Sun’s Who Cares Wins Awards at the Roundhouse in London (Yui Mok/PA)

Channel 4 has been publicly owned since its inception in 1982 by Margaret Thatcher’s Conservative government and is funded entirely by advertising.

As announced in April in a white paper by the Department for Digital, Culture, Media & Sport (DCMS), the channel is to be put up for sale – a decision that has met with widespread criticism from the creative industries and politics.

Ms Mahon said the channel’s own plans “represent our vision” of what the channel can do “while remaining owned by the British people”.

The government’s proposed privatization is “extremely different from the proposal we envisioned to embed our impact more in small and medium-sized businesses and more across the UK”.

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She highlighted the elimination of the “publishable custom model” that currently gives Channel 4 permission to make its own shows and own its own intellectual property.

“Specifically, that would mean a 25 percent own quota – while we currently buy 100 percent from external producers.

“This could mean a loss of around £320m a year for the indie sector.

“The white paper mandates only a 35% Ofcom quota for spending outside London and last year Channel 4 voluntarily spent 50% outside London. This could mean a loss of £86m a year across nations and regions.”

The broadcaster’s own proposals, first put to the Government earlier this year ahead of the DCMS announcement, mention that Channel 4 would “rationalise” its presence in London, but “at the moment there are no plans to make any changes”.

It is headquartered in Leeds and is looking to expand its digital content production studio, 4Studio, also based in the city.

It would also aim to address skills shortages by doubling investment in 4Skills, its training and development strategy, to £100m over the next decade, including setting up a 4Skills school outside of London.

In devising privatization plans, the government has claimed that public ownership prevents it from competing with streaming giants like Netflix.

Culture Secretary Nadine Dorries said in her written statement to the Commons last month that streaming services like Amazon Prime Video spent £779m on original productions in the UK in 2020, a figure she claimed was “double that of Channel 4”.

In 2021, 13.1% of Channel 4’s total viewership came from streaming, Ms Mahon said, up from 9.2% last year, with 19% of revenue coming from digital advertising.

The broadcaster said it expects to fetch around £500million in a private market sale, with reports last month suggesting the channel would raise “at least £1billion” for the government purse.

Channel 4 warned that privatization would also hurt the value of its supply chain, warning that the value of Britain’s manufacturing industry and other related sectors could be slashed by up to £3billion.

It added that there could also be cuts of up to 4,000 jobs in the supply chain, which the broadcaster is helping with a projected reduction in investment.

The group also stressed that there would likely be “uncertainty and disruption” during the legislative and sales process, which is expected to take two years. Channel 4 presents an alternative plan for privatization after the white paper

Fry Electronics Team

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