C4 sale ‘would put survival of TV production firms in doubt’
As many as 60 British TV production companies could go out of business if Channel 4 is privatised, according to a report published as the government closed its public consultation into the potential sale of the broadcaster.
Channel 4 was established in 1982 as an editorially independent broadcaster to provide a culturally challenging alternative to BBC One, BBC Two and ITV.
It is publicly owned but commercially funded, mostly through TV advert revenue, and is not required to turn a profit or focus on dividends for shareholders.
However, in June the culture secretary, Oliver Dowden, announced plans to privatise the broadcaster. A 10-week public consultation on the proposals closed last night.
Dowden has guaranteed that a new owner of Channel 4 will have to continue to make unprofitable public service programming and support the independent TV production industry, but said that a deep-pocketed investor would enable it to secure more broadcasting coups such as airing Emma Raducanu’s victory at the US Open. “If we choose to proceed with a sale, I will make sure Channel 4 remains subject to proper public service obligations,” Dowden will say today at the Cambridge Media Convention.
“If Channel 4 wants to grow at some point it will need cash. It won’t be able to compete with the streaming giants. It did a fantastic job at broadcasting the Paralympics. Channel 4 was able to bring the entire country together to cheer on Emma Raducanu. We’ve needed these national moments this last year, and we need more of them on free-to-view television.” To generate a significant return on the sale the government would have to relax Channel 4’s remit, according to a report by Ampere Analysis that says the broadcaster’s £660m annual budget for commissioning TV productions is likely to be a key cost-saving target for any new owner.
“If the government looks to relax Channel 4’s remit to derive more money from privatisation, then that would have a substantial negative impact on the UK production sector,” said Richard Broughton, an analyst at Ampere. “Channel 4 works with more small production companies than any other broadcaster – we estimate 200 over the last two years – and a privatised Channel 4 would likely leave many financially challenged.”
An analysis of those 200 production companies found almost 140 relied on Channel 4 for half or more of their TV production work.