Channel 4 executives respond to possible government privatization of the network

Channel 4 executives respond to possible government privatization of the network

Senior Channel 4 executives have opposed a possible government privatization of the broadcaster, warning that some programs could be canceled if the changes are approved.

The problem comes to a head as the network announces its best financial results in its history after a rebound in advertising revenue and spending cuts.

The government is currently considering selling Channel 4, Culture Secretary Oliver Dowden is expected to make an announcement on the company on Wednesday.

This should involve some sort of consultation on the ownership and editorial direction of the network, with a view to the possible privatization of the group as early as next year.

Channel 4 is state-owned but 90% ad-supported, giving it a unique position among UK broadcasters. Its advertising revenues allow it to create content for more diverse audiences, in line with its public service mission.

Higher-than-expected ad revenue for shows like The Great British Bake Off boosted the business in the second half of the year

“We always have to be careful not to do something that could be irreversible and possibly harm the things we do for the industry and the UK,” said Alex Mahon, CEO of the company, of the potential plans. privatization.

Switching to a for-profit model might force Channel 4 to cut back on some independent content, television produced outside London, and programming aimed at younger people.

Ian Katz, the network’s chief programming officer, praised such productions as the drama It’s A Sin, the daytime show Steph’s Packed Lunch and We Are Lady Parts, a sitcom about a Muslim punk band.

He said: “These are all shows that emerge because everyone on the channel is imbued with public service ethics, and that’s the kind of television they try to do every day, and I think there is a real risk if you lose this, that you lose a lot of this kind of programming. “

He added that in-depth media coverage could also see cuts as a result of privatization.

Channel 4 was forced to cut costs in the first half of 2020 to counter a sharp decline in ad spend – but a rebound in the second half helped the broadcaster run a pretax surplus of £ 74million, with net reserves of cash of £ 201 million.

Higher-than-expected advertising revenue for shows such as Gogglebox and The Great British Bake Off cushioned the company from the blow taken in the first half of the year, with annual revenue down just 5% to £ 934million.

In addition to the pandemic, Channel 4 is also facing an onslaught from online streaming services such as Netflix and Amazon Prime Video.

Proponents of privatization believe this is the only way to meet this challenge, allowing broadcasters to raise funds to compete with streaming services.

But Charles Gurassa, chairman of Channel 4, countered the idea, saying the broadcaster had the financial firepower to invest if needed, and “we would release it.”


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