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Whittingdale’s plot for the privatisation of Channel 4

Whittingdale’s plot for the privatisation of Channel 4

Raymond Snoddy points out the folly behind a resurgent threat to sell-off Channel 4

Five years ago there were controversial plans for a broadcasting privatisation.

They were thoroughly examined and found to be wanting in almost every respect. The sale would raise next to nothing in the greater scale of things, unless the raison d’etre of the broadcaster was diluted towards pointlessness.

You could sell any old broadcaster for a passable price as long as it did not have a legal requirement to commission all its  programmes from the independent production sector, which it helped to create in the first place.

Owning few rights after first transmission was also problematical as was the legal requirement to be innovative, diverse, and risk-taking while serving audiences that were otherwise under-served, such as the young.

A high quality one-hour daily news programme that covered difficult stories from around the world, overlooked by other broadcasters, would not get the pulses of the merchant bankers racing either.

All in all, it was comprehensively demonstrated – as far as such  things ever could be demonstrated- that a privatisation of Channel 4 would be a thoroughly bad idea and the plan was privately interred.

Five years is an eternity in politics so it is probably unsurprising that the sale, privatisation or flotation of Channel 4 is once again firmly on the Government’s agenda.

Unusually in such cases, there is continuity of personnel. First time round John Whittingdale, the then Culture Secretary was a fan of privatisation.

The plan looked odd from the start from his point of view. As Margaret Thatcher’s political secretary, he must have known better than most, that Channel 4 with its unique remit was the creation of her deputy, Lord Willie Whitelaw.

Now Whittingdale is broadcasting minister and well positioned to have another go, not least because he is close to Mrs Carrie Johnson. She was his special media adviser in 2015, around the time when talk of privatisation of the channel began to swirl.

It is said, of course, that what Carrie wants Carrie gets.

The main motivation is different now and comes from a Treasury determination to sell off every public asset that isn’t firmly screwed down, to help reduce the pandemic debt.

Given that, it is not too crazy to suggest that the Whittingdale/Carrie nexus could also ease the path to sale.

Rather wearily, we must now dust down the old arguments and go into battle once more in protection of the concept that for Channel 4, privatisation is the solution to a problem that does not exist.

The channel was hit hard, as was every commercially-funded broadcaster, by Covid and the lockdowns, but like others such as ITV, the bounce back is well under way.

There is no reason to doubt that Channel 4 is perfectly sustainable in its present form, for the foreseeable future.

If anything, the case for privatisation of Channel 4 is considerably weaker than five years ago.

Then, Patrick Barwise, emeritus professor at the London Business School estimated that the most a sale would raise would be between £400 million to £500 million with the channel’s existing remit.

The value could be closer to £350 million now because of the extra competition posed by the continuing surge of the US streaming giants since then.

There is another factor. Last time round, BT was a plausible purchaser as it moved into television. Now the telecommunication companies have gone into reverse and the  obvious candidates would be the American media groups, which are snapping up film and television groups and their libraries.

Surely though, they would be interested in Channel 4 and prepared to pay a lot more than £350 million?

In theory yes, but in reality it would be much more unlikely.

Channel 4 has no programme library and few programme rights, which are held by its main suppliers – the independent producers.

A new American media owner would want to deploy some of its own programming.  That would partly be the point, yet Channel 4 is at present required to commission its programmes from the independent sector and new commissions, rather than acquisitions, account for 70% of the total, half from outside London.

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There is an unfortunate sliding scale effect here  – at least so far as the Treasury is concerned – the more you stick to the remit, the remit of Willie Whitelaw, the lower the selling price.

Take away, or dilute the remit and what would be the point of the channel? You would be selling little more than a  broadcasting slot and a bit of name recognition, both of which would be wasting assets in the digital age of endless choice.

The overall balance sheet of a privatisation does not look attractive.

For the sake of argument, a Channel 4 stripped of many, if not  most, of its current obligations, might raise £1 billion – a sum that would barely register in the face of Treasury debt of around £2 trillion.

The broadcasting and cultural deficit would be considerable. A British media asset would fall into American, or international hands.

The independent production sector, particularly the smaller indies, would suffer.

A distinctive British voice would be silenced, or at least drastically changed, for ever.

And then there is politics. This populist Conservative government, unlike any other we have ever had, does not like Channel 4 and Channel 4 News in particular.

Shamefully no minister, let alone Prime Minister Boris Johnson, will appear on Channel 4 News for fear of being  asked difficult questions and being held to account.

This is so even though Channel 4 News, which is made by ITN, is subject to the same impartiality rules as other British broadcasters.

It may not be the main motivation but getting rid of, or toning down the independent spirits of Channel 4 News, would be an additional bonus for the Johnson government.

Can you see a channel owned by mainstream Americans protecting an hour of serious news in primetime, often devoid of mid-break advertising, or related programmes such as Unreported World?

It’s a bit like a broadcasting version of the Northern Ireland protocol. You can’t put a border in the Irish Sea without upsetting, or damaging the interests of someone.

You cannot sell Channel 4 and have it at the same time.

The case for privatisation was weak five years ago and is even weaker now, yet this time the threat is greater.

The only chance is to point out as many times as it takes the folly of this bad idea until it is interred again – this time permanently.

RICHARDBEDWELL, Consultant, RBA, on 03 Jun 2021
“As Channel Four's first Marketing Manager( 1982-85) it's difficult for me not to get a bit emotional and perhaps overly nostalgic about the Channels origins, remit and ethos - and to base too much of my current view of how things should be now on how they were back then. It is therefore very useful to have Ray's financial and political assessment of just how unproductive a move privatisation would be.
Most people under 50 cannot remember a time without C4 and do not realise the impact it has made on the TV environment since its inception.
In a world where 'outsourcing' can almost be a dirty word C4 has made a huge success of it over nearly 40 years and has been instrumental in the creation of a huge and thriving production industry. Its independent and still distinctive voice must not be hampered by any short-sighted cash grabbing sale or dogma driven political decision making.”

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