The UK government is pushing ahead with plans to privatize Channel 4.
According to sources, Channel 4 CEO Alex Mahon sent an email to staff this afternoon saying that the network has been informed by the government that it will proceed with the proposal made last year.
Channel 4 has proposed a vision for privatization and the sale will be pursued up to around £1B ($1.3B), according to The Times.
The suggestion was first made last year by former UK culture secretary John Whittingdale and was taken up by incumbent Nadine Dorries, although the decision was delayed on at least two occasions.
The move will shake up the UK broadcasting sector and will be the most dramatic change to Channel 4 in its 40-year history, as it becomes a privately-owned broadcaster.
Channel 4’s unique financing model sees it make money from sources such as advertising and digital, which are then reinvested in programming, instead of returned to shareholders.
As such, a sale has been strongly opposed by the UK’s production community, many of whom are reliant on Channel 4’s publisher-broadcaster model. This essentially allows producers to keep the rights to shows they make.
The government is looking to allow Channel to make and sell its own shows as well as expand internationally and have more access to capital.
Companies previously connected a the purchase of Channel 4 include ITV, Sky and Discovery.
“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,” said a Channel 4 spokesperson. “Channel 4 has engaged in good faith with the government throughout the consultation process, demonstrating how it can continue to commission much-loved programmes from the independent sector across the UK that represent and celebrate every aspect of British life as well as increase its contribution to society; while maintaining ownership by the public.”
The spokesperson added, “The proposal to privatise Channel 4 will require a lengthy legislative process and political debate. We will of course continue to engage with DCMS, government and Parliament and do everything we can to ensure that Channel 4 continues to play its unique part in Britain’s creative ecology and national life.”
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