Channel 4 is to be privatised before the next general election; the UK government has decided. The move will be the biggest sale of a state-owned asset since Royal Mail in 2013, and opens up the possibility of foreign ownership of the broadcaster.
Offers for the channel are expected to be tabled this year, with a likely price tag of £1bn – money which ministers insist will be invested back into the creative industries.
Government ministers informed the broadcaster’s board on Monday of the privatisation plans, following months of discussion in which it became increasingly clear Boris Johnson and his colleagues were leaning towards a sale. Concerns over the channel’s finances reached a peak during the Covid crisis.
Ministers argued that keeping the company in public ownership was restricting its ability to raise needed funds. But Channel 4’s supporters claim that the Government’s push for privatisation of the channel is a form of punishment for its left-wing stance and staunch criticism of Boris Johnson. Backlash from supporters is already building, with questions over whether it will still be able to commission independent, unproven programmes and maintain a Left-of-centre news approach.
The 40-year-old broadcaster, publicly owned but funded commercially by advertising, has long been known as Britain’s most controversial broadcaster, and has a long-standing record of capturing a younger audience and producing programmes the BBC would not commission. The broadcaster has delivered shows including British drama This is England 86, Black Mirror, Father Ted, The Inbetweeners, Peep Show, Big Brother, Skins and soap opera Brookside.
The Telegraph reports that government sources have indicated Channel 4 will remain a “public service broadcaster”, meaning the new owner will be required to meet strict requirements on news output. Boris Johnson has clashed with the channel in the past; in 2019, when he declined the invitation to join a 2019 election debate on climate change, he was replaced with an ice sculpture.
In retaliation for what Lee Cain, the former Conservative spokesman, blasted a “provocative partisan stunt”, tories warned Channel 4 that its broadcasting remit would be placed under review. Also, in 2019 Channel 4’s then head of news and current affairs described Mr Johnson as a “known liar” and a “coward”, comparing him to Russian president Vladimir Putin.
Veteran Channel 4 News broadcaster Jon Snow, who recently stepped down from his role, had also attracted criticisms of lacking impartiality over claims that he chanted “F— the Tories” at the Glastonbury festival five years ago.
A government source explained the decision for the sell-off, stating: “Current restrictions mean it has limited ability to borrow money or raise private sector capital to invest in new platforms and products, and it cannot own and sell its own content.
“A sale could allow it to set up its own production house and generate its own intellectual property. As it stands, Channel 4 cannot fulfil its potential and compete effectively with the streaming giants for talent, audiences and content.
“We expect a lot of interest in purchasing Channel 4 from a range of serious buyers who want to build on Channel 4’s strengths and help unleash its full potential. Bids will be assessed carefully and any new owners will have to pass Ofcom’s fit and proper persons test.”
However, the Channel 4 board has argued that its key commitments could be undermined by a new owner, who may be motivated to cool down its risk-taking shows in favour of programmes that can drive better returns for shareholders.
Alex Mahon, the chief executive of Channel 4, has argued there is little need for privatisation owing to the broadcaster’s strong financial performance in the wake of the pandemic.
Ms Mahon said approximately 80% of all 16 to 34-year-olds are signed up to the channel’s All4 catch-up service, and it is two years ahead of its target to spend half its content budget with producers outside of London.
In an email to staff, she wrote:
“In our engagement with government during its period of reflection, we have proposed a vision for the next 40 years which we are confident would allow us to build on the successes of the first 40.
“That vision was rooted in continued public ownership, and was built upon the huge amount of public value this model has delivered to date and the opportunity to deliver so much more in the future.
“But ultimately the ownership of C4 is for government to propose and Parliament to decide.”
UK Culture Secretary Nadine Dorries said that “a change of ownership will give Channel 4 the tools and freedom to flourish and thrive as a public service broadcaster long into the future”.
The next question is who ministers would be comfortable selling it off to. ITV is understood to be keen on a takeover, while Discovery has held informal talks. Sky, Channel 5 owner Paramount and even Netflix and Amazon could explore bids. Rupert Murdoch has also previously been linked to a possible bid for the channel.