UK government to hold formal Channel 4 privatisation review

Alex Mahon

The UK government is to hold a formal review into selling Channel 4, the British broadcaster behind hits such as It’s A Sin, following months of speculation about the service’s future.

The Department for Digital, Culture, Media and Sport has announced that it will oversee the review, which will examine whether privatising the broadcaster “could help secure its future as a successful and sustainable public service broadcaster.”

Channel 4 has been owned by the UK government since its launch in 1982, but ministers have argued that the rise of streaming services has changed the landscape to such an extent that the broadcaster may be better placed in private ownership.

They have further pointed to ITV and ViacomCBS-owned Channel 5 as examples of successful privately owned commercial public service broadcasters and suggested that Channel 4 would be able to “diversify its income streams”.

UK Culture secretary Oliver Dowden has said that changes to the model may also allow Channel 4 to invest in new technology and produce new content and programming.

“This would better allow Channel 4 to compete and strengthen its role as a public service broadcaster and secure the long-term benefits it can bring to the creative industries and to audiences.”

However, Channel 4 execs appear wary of the idea of privatisation and have previously rejected such plans when they were previously raised in 2016.

It’s A Sin

“Irreversible” damage

During Channel 4’s announcement of its 2020 report, CEO Alex Mahon cautioned: “We’ve always got to be careful of doing anything that might be irreversible that could possibly damage some of those things that we do for the sector and that we do for the UK.”

Mahon further pointed to the broadcaster’s “record financial surplus” of £74m ($103m) last year and “excellent” financial health. This comes after the broadcaster was forced to take almost £250m ($310m) of cost-cutting measures in April last year to deal with the advertising slump brought about by Covid-19, with £150m slashed from its programming budget.

By September, Mahon was already confident enough to assure that Channel 4 would increase its budget “massively” for 2021 as the ad market rebounded.

Late last year, Channel 4 unveiled a new corporate strategy called Future4, to accelerate its transition to digital, placing a renewed focus on its streaming services, while also launching a new £30m ($40m) content fund.

The broadcaster has invested more than £11bn in the UK production and creative sector since its launch in 1982, supporting the creation of global formats including Come Dine With Me and Gogglebox.

Gogglebox

Archaic ideas

John McVay, the CEO of UK screen sector trade body Pact, meanwhile, warned that the UK government’s proposals to sell off Channel 4 would “damage small businesses across the UK at a time when they are recovering from the pandemic and rebuilding their businesses.”

Further condemning the plans, McVay said: “The current government’s thesis that bigger is always better is an archaic concept from an analogue past.

“Pact is very concerned about the government’s proposal for the future of Channel 4, as their profits are reinvested in hundreds of British companies who not only make high quality, diverse programmes for the British public, but exploit their IP around the globe taking those programmes to international audiences and bringing money back to the UK economy.”