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Channel 4 is fighting back against privatisation with an alternative plan for its future model that was previously rejected by the government, as it announced record financial results for 2021.
The UK broadcaster’s proposal to head off privatisation, first reported by the Financial Times last month, outlined the business case for the commercially funded broadcaster to remain in public hands through a hybrid model that would give it access to private capital and debt.
Channel 4 had presented culture secretary Nadine Dorries with the plans in February, before she announced that the network would be put up for sale.
The broadcaster on Thursday revealed its results for the past financial year. Revenue jumped by 25 per cent to £1.16bn in 2021, while it recorded a £101mn surplus, representing the first time it reached three figures since the launch of the network in 1982.
Channel 4 said its results, which were published by the FT last month, were “record breaking”.
Alex Mahon, chief executive of Channel 4, told reporters there was “plenty of evidence that [privatisation] is not what the public nor industry wants”, adding that there were additional “stages to go in ownership discussions”.
Questioning the government’s plans she said: “I’m not against private capital or making money in business, but I know the impact that [privatisation] would have on Channel 4 better than anyone else.”
Channel 4 warned that were its programming to be driven by motives to maximise audience share and profit it would risk losing its young audience that is highly valued by advertisers.
“Anything that weakens Channel 4’s distinctiveness will no doubt be of concern to advertising agencies . . . and they’re right to be concerned about that,” said the network’s chief operating officer Jonathan Allan.
“They are also right to be concerned about competition in the UK for the advertising pound,” he added, pointing to the consolidation that would likely follow a sale of Channel 4.
Dorries has faced significant backlash to her plans, including from senior Conservatives who have criticised her argument that government ownership is “holding back” Channel 4 from competing with the likes of streaming platforms such as Netflix and Amazon.
The department for digital, culture, media and sport told the FT it has “carefully considered” Channel 4’s proposals. But it concluded that, despite the network having addressed some issues identified by the government, changes to the broadcaster’s business model could “best be delivered through a change of ownership rather than at risk to the taxpayer”.
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