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Daily Mirror
Daily Mirror
National
Harry Thompson

What does privatisation mean for Channel 4? Funding, timeline and why it's happening

Channel 4 is due to be privatised, it was announced to the broadcaster’s staff via email on April 4.

Alex Mahon, Channel 4 ’s chief executive, wrote: “We have been informed in the last hour that the government will shortly announce that the secretary of state has decided to proceed with the proposal to privatise Channel 4."

The move has been met with widespread concern, with well-known stars flocking to give their verdict on the events.

The decision to sell the organisation, first formed in 1982, is the largest example of privatisation since the Post Office was flogged 10 years ago.

The Secretary of State for Digital, Culture, Media and Sport, Nadine Dorries, said that government ownership was "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 insisted.

The move was described by shadow culture secretary Lucy Powell as “cultural vandalism”.

What does the sell-off mean for Channel 4?

Channel 4 has often backed pioneering work such as It's A Sin (Channel 4)

Labour has stressed that the privatisation of Channel 4 could cause a “great deal of damage”.

Ms Powell expressed concern over where the ownership of the broadcaster could end up. She said: “I fear that … rather than competing with some of the big US streaming giants, it is more likely to be bought by one of them.

"That will take money out of the UK economy, out of the creative industries and the independent sector that has so thrived under Channel 4."

Conservative MP Julian Knight tweeted that he believed the move would give Channel 4 more independence and space to compete.

He said: “It is certainly true that Channel 4 will have greater freedom to compete once privatised and if managed well it should be able to continue to innovate and crucially appeal to young audiences - a real usp in today’s broadcast landscape.”

The public broadcaster is already funded by adverts, and so it is unlikely that this will change as it does not currently receive money from the government or the licence fee.

There are widespread concerns the move will harm independent production companies with close links to the provider. It is thought as many as 60 could be at risk of closing.

In the past, the organisation has never been tasked with making money, with profit being put back into the creation of its content.

According to the Guardian, analysts have claimed that the sale could see a 40% to 50% cut to its £660m programming budget in an effort to get the brand into a more commercially focused position.

This means that shows and content that don't make much money are likely to face the chop.

What does Channel 4 and its stars say about the sell-off?

Channel 4 itself doesn’t appear to be best pleased with the news.

A spokesperson said: "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."

In his email, Mahon set out that the organisation had been pleased with its work over the past 40 years and had hoped to have seen this continue in the same way over the next 40.

The broadcaster has laid out plans to the government about how it could continue to thrive under government ownership and was maintaining optimism that the sale wasn't yet a done deal.

In a tweet, Location, Location, Location star Kirstie Allsopp said: “This is a load of utter twaddle! No true Conservative would sell Channel 4, Lady T will be spinning in her grave. C4 was set up to foster the British film & TV industry and it has done that job admirably. Any Tory MP who votes for this is a traitor to their party & country.”

Sir David Attenborough suggested the move formed part of “shortsighted political and financial attacks” while Invictus Games medalist and Strictly Come Dancing star JJ Chalmers said: "Genuinely, a piece of my heart just broke. @Channel4 is remarkable… and important… and… the list is [too] long.

"The fact that those who hold [its] fate in their hands don’t see [its] true value… is the saddest part."

When will the Channel 4 sale happen?

The actual move to privatise may take a little while, provided it can get through parliament.

The proposal is due to be added to a draft Media Bill, which will then be included in the Queen’s Speech in May.

The bill will need to get through both the House of Commons and the House of Lords before Channel 4 can be sold.

Overall, the process could take as long as 18 months.

In his email, Mahon said: "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."

What other implications could there be from Channel 4's privatisation?

Shadow Housing Secretary Lucy Powell has been a strong critic of the proposed sale (Getty Images)

Ms Powell stressed that the sale would be likely to harm people outside of London the most.

She said: “I think it will cause a great deal of damage to jobs and opportunities in the creative industries, especially in Leeds and Bristol, and Manchester, and outside of London.”

It has been noted that the money the government makes out of the sale would likely be spent on creative and independent production companies, which would in effect be putting money directly into its funding pot for the levelling up agenda.

Dorries described the move as a “creative dividend for all” as she claims the money would be put back into the creative sector.

Who could buy Channel 4?

At the time of writing, it seems the organisation most likely to purchase Channel 4 would be US-based Discovery, which is joining forces with WarnerMedia, the parent company of CNN and HBO.

Channel 4 faced privatisation in 2016, receiving interest from Discovery at the time.

The broadcaster has been valued at £1 billion.

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