The privatization battle looms for Channel 4

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Channel 4 braces for another privatization battle as the government considers whether to bring in a “deep-pocketed” investor to help broadcaster through deep advertising recession and faster shift to streaming .The ministers are laying the groundwork for a review of the public broadcaster that could lead to the sale of all or part of it. It comes as concern mounts over the future of Channel 4. The broadcaster is state-owned but receives no taxpayer funding and relies almost entirely on advertising sales. The TV advertising market is expected to decline 20% this year as the coronavirus prompts brands to cut budgets.

A government source said: “Channel 4 has no other income. They are very dependent on advertising and that is going to be severely tested.

“Having an owner, or co-owner, with big pockets and ready to invest, is really valuable.”

It is understood that a potential privatization could mean a complete takeover by a rival such as Channel 5, owned by ViacomCBS, or the sale of a minority stake to a newcomer, the source said.

News UK, the publisher of Rupert Murdoch’s newspaper and radio broadcaster, is preparing to embark on video programming, for example. He has repeatedly explored options to get on TV, industry sources have said, particularly following the Comcast takeover of Sky, which left Mr Murdoch without a stake in UK broadcasting. A minority investment in Channel 4 could help solve media plurality issues, said a media merger specialist.

The talks, which are at an early stage and may not result in a transaction, in part because legislation may be required, are part of plans for a radical overhaul of traditional television and public service broadcasting licenses.

In addition to a potential privatization of Channel 4, ministers are considering removing public service obligations on ITV and Channel 5.

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