Privatising Channel 4 would be a win for the government – and a loss for everybody else
From the viewers to the independent producers to the channel’s many employees based outside of London – we all lose at the hands of these proposals
Today, the UK government’s consultation on the privatisation of Channel 4 closes.
The public have had ten weeks, over the holiday period, to tell the Department for Culture, Media and Sport (DCMS) why they do, or do not, want the channel to be sold off. What will become of our answers though, is hazy. The consultation says that all “in-scope” responses will be taken into account but that the number of responses won’t count, rather the “careful consideration of the points made in the responses”. Make of that what you will.
The key to understanding the proposed sell-off of Channel 4 is that it should be placed in the context of this government’s dislike of public service broadcasting (PSB), which includes not just the BBC and Channel 4, but ITV, Channel 5, Ulster TV and STV. There is also the question of Boris Johnson’s possible personal animus against Channel 4. There is evidence the prime minister cancelled a number of interviews and a debate with Channel 4 after the then-head of news referred to him as a “known liar” in August 2019.
But whatever the reasoning behind this privatisation drive – and whether it stems from Number 10 or DCMS – it is a fact that the unique nature of Channel 4 – its risk-taking, its diversity of content, its push into the regions for content – make it a powerful part of the UK’s public service broadcasting ecosystem. So pulling it out of public ownership will impact the BBC and ITV. We know from judicious leaks to selected newspapers that the BBC will be forced to accept a lower-than-inflation licence fee increase over the next five years, leading to huge cuts in an already diminished content provision. We know that this is on top of a 30% cut in funding for the BBC since 2010. So selling off Channel 4 is a logical step for a government engaged in this savage diminishing.
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The government has also set up a panel to look into the future of Public Service Broadcasting. An inkling of the direction this panel might take is given in the first instruction about its work. The panel is asked to consider:
“Whether the concept of public service broadcasting is still needed, and, if so, what a modern PSB system should contribute to economic, cultural and democratic life across the United Kingdom.”
It seems extraordinary that any government would question the need for a publicly owned broadcast media. By contrast, the Irish government last year set up a Media Commission designed specifically to find ways to strengthen what its culture minister, Catherine Martin, described as “an energetic public service broadcaster that informs, entertains and reflects us as a people, and delivers value for money”.
The proposed sell-off should be placed in the context of this government’s dislike of public service broadcasting
There is no doubt that media-consumption patterns are changing dramatically – though it is notable that throughout the pandemic, levels of trust in PSB news reporting (particularly from the BBC) shot up. So it is far from a given that PSB has no place in this new landscape. But the panel is nevertheless asked to consider all the ways in which it might not be viable, including ‘the future role of the Channel 4 Television Corporation.
Nothing about the panel’s work is to be made public – not the evidence it takes, the witnesses it interviews, nor the tenor of its discussions in its six meetings across the year. But, despite repeated requests to DCMS from the likes of the PSB campaign group, British Broadcasting Challenge, for the panel sessions to be open to public scrutiny, it currently remains the case that the advice the secretary of state will receive about the vital matter of our publicly owned media institutions, will remain secret. We may never know how Channel 4 fared in these secret discussions.
But what is not secret is the government’s acknowledgement, in the preamble to its consultation document, that its “preferred option is to facilitate a change of ownership of Channel 4”. It cites increased access to capital, the ability to take advantage of strategic partnerships and acquisition opportunities, the ability to diversify revenue sources. Its argument, broadly, is that Channel 4 relies too much on TV advertising and that only private capital can bail it out.
But these arguments have been shot down by media analysts, the unions, and groups like the Media Reform Coalition and our British Broadcasting Challenge. They point out that in 2020 Channel 4 reported a pre-tax profit of £74m, that it has not requested any increase in its £200m borrowing limit, that the channel saw advertising revenue in the past year increase from 2019 levels and that it has launched a new, alternative funding strategy, Future4. The truth is that while revenues from television advertising are steadily declining across the board, privatisation would only add the considerable additional financial burden of creating dividends for shareholders.
What would be lost if C4 was privatised?
Last week, in an extremely strong rebuttal of government arguments, Channel 4 released figures showing the full extent of the damage that will be caused by any sell-off. The Channel 4 contribution to the supply chain, particularly outside of London, would fall by around 30% – with the contribution of around £2bn being transferred from the creative economy and regions, to a new private owner. There would be a 35% drop in regional jobs dependent on Channel 4.
We the viewers would certainly lose the risk inherent in commissioning shows such as ‘Googlebox’, ‘Queer as Folk’, ‘Drop the Dead Donkey’, ‘Top Boy’, ‘It’s a Sin’, even ‘Derry Girls’. Would a global media company want the irritant of the ground-breaking and strongly resourced Channel 4 News? What would happen to the famed C4 ‘remit’ whereby it must listen to and broadcast alternative voices, diverse views and communities? How else would more than nine million people have been able to watch Emma Raducanu’s stunning US Open triumph last Saturday night if not for the channel’s last-minute deal with Amazon? There are criticisms of Channel 4 today, saying that it has become more risk-averse, less likely to tread fearlessly among minority interests and beliefs – but no one imagines that, say, Liberty Global would do better.
The independent producers would certainly lose out. The publisher-broadcast model which allows them, rather than Channel 4, to own their broadcast material is more than a life line, particularly for small outfits. Hard to see a global media company agreeing to that.
But it is in the government’s own territory that Channel 4 shows its flexibility. It is a champion of ‘levelling up’. It has moved its headquarters to Leeds. It produced 58% of its output in 2020 in the nations and regions outside London. It has committed to spend 50% of its budget outside London by 2023. It spent £189m on production companies in nations and regions in 2019 – money that organisations like the TUC Yorkshire and the Humber know leads to a supply chain from set painters to scaffolders.
So what is it all about? Pat Younge, himself an independent producer and chair of the British Broadcasting Challenge, was quoted in the Financial Times: “To me, it’s ideological. If you look at their reasons for why they’d sell C4, they don’t stack up. This looks like an answer in search of a problem.”
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