Channel 4 is to be sold by the government ahead of the next general election after ministers decided privatization was the best way to ‘preserve’ the country’s public broadcasting sector.
Culture Secretary Nadine Dorries said the privatization of Channel 4 will give the channel “the tools and freedom to thrive and prosper as a public service broadcaster well into the future”.
“Channel 4 is rightly a valued place in British life and I want it to stay that way,” she added. “I’ve come to the conclusion that government ownership prevents Channel 4 from competing against streaming giants like Netflix and Amazon.”
The channel described the restructuring of funding as “disappointing” after warning of a “real risk” to its program last year when the government launched a privatization consultation. A spokesman said yesterday that “significant public interest concerns” had not been officially acknowledged before the decision was made.
Channel 4 was considered for privatization by the governments of Margaret Thatcher, John Major and Tony Blair. And in 2016 it was reported that the The station’s future has been re-examined by the government.
From the looks of it, Channel 4 has been commercially funded since its inception in 1982, so unlike the BBC it receives no financial support from taxpayers. The privatization of the network will result in ownership being transferred from the government to a private company or individual.
Over 90% of the network’s revenue currently comes from “sales of television advertising on the shows it airs,” according to The Guardian. “The remaining 9% of revenue comes from operations, including 4Studios, which creates digital content for advertisers, and new non-ad partnership deals.”
It’s not profitable, but its “mission has never been to make a profit,” the newspaper added. The money earned is instead “reinvested in commissioning and buying programs from mainly UK television production companies to support a key national industry”.
The government said last year that the channel was “vulnerable to unstable advertising markets”. Reuters reported, arguing that “a move to private ownership with a changed brief could help secure his future.”
However, a number of cultural figures have scrapped the plans, including Armando Iannucci, author of the Alan Partridge character and the political sitcom The thickness of it, tweet: “Our TV industry is a British success story. Channel 4’s profits flow back into the industry: through the sale, they are passed on to American shareholders.”
The government is now facing “a backlash” from senior Conservatives over the “controversial decision,” she said The Independent. Foreign Affairs Committee chairman Tom Tugendhat said times radio: “I am not yet convinced that this will achieve the goal set by the government.”
Also former cabinet minister Damian Green called The decision was “very unconservative” and the result of “politicians and officials believing they know more about running a business than the people running it.”
runners and riders
As the consultation process began, Culture Secretary John Whittingdale told Times Radio he was “in no way ruling out” the channel being bought by a company like Netflix or Amazon. “We think it makes sense to look at alternative ownership models to ensure Channel 4 can continue to invest in programming and compete with these other services,” he said.
Whittingdale also told the radio station that a consultation would set ground rules for potential buyers.
“There would be competition issues if a very well-established broadcaster wanted to merge, and that’s something that’s automatically a competition issue, but I’m by no means excluding existing streaming services or others,” he said.
Discover is “the industry player most likely to buy Channel 4, with the fewest regulatory hurdles,” he said The guard. The company expressed “interest” in the channel in 2016 and “remains very active in the UK market”.
But ITV has “lobbyed in Whitehall over the possibility of a takeover by a ‘national champion’ to cushion the political fallout of another foreign-owner buyout of a British ‘crown jewel’,” the newspaper continued. The move would “help secure ITV’s own future” “by giving it a much larger scale,” he said The Telegraph.
The newspaper also listed Sky and Amazon as potential bidders, who have already struck commercial deals with the broadcaster. Paramount was also “exemplified by ministers as the kind of deep-pocketed supporter who could take control.”
There will also be “significant interest” from private equity buyers, The Guardian added.
Channel 4 chief executive Alex Mahon responded to news of the sale by saying there was a “long process ahead”.
The channel’s privatization is “an undecided matter,” The Times said. Ministers must pass legislation before a sale can take place, “preparing the state for a showdown in the House of Commons”.
And “until the sale is complete, it’s unclear exactly what a privatized Channel 4 might look like,” he said metro. The broadcaster said yesterday it remains “legally committed to its unique public service mission”.
“The focus of the organization will be how we ensure we deliver on the mandate for both our viewers and the UK creative industries across the UK,” he added.
https://www.theweek.co.uk/news/media/953259/who-will-buy-channel-4 Who could buy Channel 4?