Channel 4 privatisation – what does it mean?
Channel 4 is set to be privatised as the government rejected the broadcaster’s proposal to keep it in public ownership.
The Department for Digital, Culture, Media and Sport will formally trigger the process and it has been reported the offer could be as much as £1bn. The move, which has been dubbed controversial, will see the public-owned company privatised after 40 years.
The announcement has come after 10 weeks of public consultation, with ministers coming to the conclusion that public ownership is “holding it back in the face of a rapidly changing and competitive media landscape.”
A government source claimed a change of ownership “will remove its straightjacket, giving C4 the freedom to innovate and grow so it can flourish and thrive long into the future and support the whole of the UK creative industries.”
Culture Secretary Nadine Dorries later said: “I have come to the conclusion that government ownership is holding Channel 4 back from competing against streaming giants like Netflix and Amazon.
“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.”
She added: “I will seek to reinvest the proceeds of the sale into levelling up the creative sector, putting money into independent production and creative skills in priority parts of the country – delivering a creative dividend for all.”
The move will require fresh legislation as Channel 4 is a publicly-owned and commercially-funded broadcaster – it does not currently receive government funding and does not receive money from the license fee.
The proposal will be part of a draft Medial Bill, set to be in the Queen’s Speech next month as part of wider reforms to public service broadcasting.
Plans opposed
Plans to sell Channel 4 have been slammed by MPs and some Tory backbenchers, who believe it will deprive the country of a vital cultural asset.
The warnings come as fears grow over that Channel 4’s commitment to diverse and groundbreaking content could be watered down in private hands.
The decision to privatise is also likely to impact independent production companies that have close links with the broadcaster.
Channel 4 ‘disappointed’
The broadcaster has said it was “disappointing” that the sale would go ahead “without formally recognising the significant public interest concerns which have been raised.”
Labour’s shadow Culture Secretary Lucy Powell said: “Nothing screams a rudderless government more than this.
“Selling off Channel 4, which doesn’t cost the taxpayer a penny anyway, to what is likely to be a foreign company, makes absolutely no sense. It will cost jobs and opportunities in Yorkshire and hit our creative economy.
“It’s cultural vandalism from a government that’s run out of ideas, run out of road and has no interest in levelling up.”
‘Long process ahead’ – Channel 4 CEO
In an email to staff members before the announcement, Channel 4 CEO Alex Mahon said: “My priority now, along with the rest of the Exec team, is to look after all of you and the wonderful Channel 4 spirit, and make sure we all carry on doing what we do best —making incredible shows for our audiences, creating opportunities for young people and supporting the creative industry across the UK.
“There will now be a long process ahead — it could take 18 months or more for the required legislation to go through the House of Commons and then Lords. During that time, we’ll continue to work with DCMS and Government, and with our supporters across the industry to make the arguments to ensure that Channel 4 can continue to deliver its remit.”
Channel 4 statement
Channel 4 said in a statement: “With over 60,000 submissions to the Government’s public consultation, it is disappointing that today’s announcement has been made without formally recognising the significant public interest concerns which have been raised.
“Channel 4 has engaged in good faith with the Government throughout the consultation process, demonstrating how it can continue to commission much-loved programmes from the independent sector across the UK that represent and celebrate every aspect of British life as well as increase its contribution to society, while maintaining ownership by the public.
“Recently, Channel 4 presented DCMS with a real alternative to privatisation that would safeguard its future financial stability, allowing it to do significantly more for the British public, the creative industries and the economy, particularly outside London. This is particularly important given that the organisation is only two years into a significant commitment to drive up its impact in the UK’s Nations and Regions.
“Channel 4 remains legally committed to its unique public-service remit. The focus for the organisation will be on how we can ensure we deliver the remit to both our viewers and the British creative economy across the whole of the UK.”
Privatising risks damaging UK’s TV and film productions
John McVay, chief executive of the trade body Pact – which represents UK independent production companies, said privatising the channel was “unnecessary” and risked damaging the UK’s TV and film production industry.
He added: “Unlike other broadcasters, it makes none of its programmes in-house – but a private owner could shift production away from independent producers to cut costs, with a knock-on impact on the wider industry.
“Selling it off now risks reducing the opportunities for independent producers, and reducing the amount of programming commissioned outside London – levelling down, not levelling up. It isn’t too late for the Government to think again.”
Philippa Childs, the head of the broadcasting, entertainment, communications and theatre union, described the action as a “short-sighted sale of an incredible UK asset”.
She added: “This cynical move prioritises the interests of shareholders ahead of public service and ignores myriad responses to the Government’s consultation, and vehement opposition from the industry.
“The Government is yet to present any evidence that a change in ownership would benefit both Channel 4 or the public.
“Bectu condemns this short-sighted and destructive move that deals a major blow to the UK’s creative sector, the creative economy and jobs of UK freelancers. With the creative industries amongst the hardest hit by the pandemic, and continuing to face a chronic skills shortage, there is no worse time to introduce such uncertainty, particularly for independent producers.”
Channel 4 stars react to news of sell-off
Culture Secretary Nadine Dorries tweeted on Monday that “government ownership is holding Channel 4 back”.
But Kirstie Allsopp, star of Location, Location, Location said it was “a load of utter twaddle”.
“C4 was set up to foster the British film & TV industry and it has done that job admirably.”
