Channel 4 Sounds Alarm Over Sale, Warning It Could Irreversibly Damage British TV Landscape

The Great British Bake Off
Love Productions

Channel 4 has spelled out what could be at risk if the UK government pushes ahead with proposals to sell the iconic broadcaster behind hits including The Great British Bake Off and It’s A Sin.

The noise around privatization has grown significantly louder in recent weeks, with ministers expected to launch a consultation on the matter, alerting potential buyers to a prized piece of UK broadcasting real estate.

Speaking as Channel 4 published its annual report on Tuesday, CEO Alex Mahon told journalists that a sale “could possibly damage some of those things that we do for the sector and that we do for the UK.”

Specifically, she pointed to Channel 4’s unique remit as a not-for-profit publisher broadcaster and the role it has played in building the UK’s world-leading independent production sector since its launch in 1982.

Producers retain rights to shows Channel 4 commissions and then exploit them around the world, creating global hits like Undercover Boss and Come Dine With Me. “You can’t rely on Netflix or Amazon or others to do that,” Mahon said pointedly.

She added that privatization could also pose a threat to Channel 4’s mission to serve young viewers and spend money outside of London. Channel 4 is also tasked with championing diversity and innovation through its output.

“You’ve got to think about how do you make those things stronger and stronger, and then balance that with what the optimal ownership structure is. I would be saying we’ve always got to be careful of doing anything that might be irreversible,” Mahon said. “My question [to the government] would be, what’s the analysis to show [that privatization] makes us stronger.”

Her comments come as 35 British lawmakers have signed a parliamentary motion raising concerns about privatization. Those who have put their names to the motion include former shadow chancellor, the Labour MP John McDonnell.

The debate is raging about Channel 4’s future as the broadcaster’s chairman Charles Gurassa boasted about its “extraordinary financial performance” against the backdrop of the coronavirus pandemic last year.

Channel 4 weathered the worst of the pandemic, with revenues falling just 5% to £934 million ($1.3 billion) in 2020 after the ad market collapsed in spring and the company was forced into drastic cuts, including slashing its content budget by £150M. The positive momentum is expected to continue into 2021, with Channel 4’s revenue forecast to top £1B for the first time ever this year.

Channel 4 posted a pre-tax surplus of £74M, which was the highest in its 38-year history, while its cash reserves totaled £201M. Channel 4 is putting £40M back into its programming budget this year and expects its spending to return to pre-pandemic levels (around £660M) in 2022.

Other highlights from the annual report included:

  • Channel 4 spent £522M on content last year, which was down on £622M in 2019 due to the pandemic
  • Channel 4’s digital ad revenue hit a record high of £161M, meaning it accounted for 17% of total sales. Channel 4 plans to generate 30% of its total revenue from streaming over the next five years
  • All 4 racked up a record 1.25B streams last year, which was up 26% on 2019. TV viewing was up 2% across its portfolio in 2020, the first year-on-year increase since 2011
  • Despite other UK television CEOs taking pay cuts during the pandemic, Mahon’s total remuneration rose more than 5% to £991,000 in 2020. Chief content officer Ian Katz’s pay also increased 1.5% to £536,000
  • Channel 4 made no progress on boosting ethnic diversity among its workforce. Some 17% of its employees were from diverse backgrounds, which was in line with 2019’s five-year low. Mahon previously described 2019 as an “outlier” year because of Channel 4 relocating staff to Leeds.

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