Channel 4 has submitted its formal response to a Government consultation on potential privatisation – with bosses making the case that moving away from its currently public ownership model in which advertising revenue is ploughed back into programming would negatively affect both its programming and its economic benefit to the country.
In 2019, Channel 4 announced it was moving its headquarters to Leeds and opening creative hubs in Bristol and Glasgow. It also has offices in London and Manchester. There are now more than 200 staff based in Leeds, with an intention to have more than 400 workers based outside London by the end of this year.
The Leeds headquarters were only officially opened this month but Channel 4 said in its response to the Government that the site’s future would be in question if privatisation does go ahead.
“There are limits to what can be mandated through a revised remit,” it stated. “For example, while the Government could mandate Channel 4’s voluntary ‘50 per cent out of London’ commitment by including it in an updated licence, and even make the National HQ in Leeds a condition of any sale, it is hard to foresee how the Government could require a sustained level of staffing in that office or dictate the type of jobs that would be based there.”
The submission said while the channel currently has “burgeoning bases” in Leeds, Manchester, Glasgow and Bristol, any private owner “would have a cost-cutting incentive to reduce to one or two core offices”.
The report said that Channel’s 4 publisher-broadcaster model had been key to its new regional bases which may not continue under privatisation.
“While the Government have suggested potentially making the Leeds office a condition of sale in any transaction and potentially mandating a certain level of commissioning spend being directed towards small companies, it is difficult to see how the extent and breadth of Channel 4’s investment across the UK could be protected under a model of private ownership,” the submission stated.
“We would also note that the Government is highly unlikely to be able to provide a long-term guarantee for Channel 4’s regional commitments – for example in the event of a re-sale of Channel 4 by its new owner or if its owner is purchased in turn by another organisation.”
It adds: “We note, for example, the experience of Kraft (now Mondelez International) when they bought Cadbury – they were criticised for cutting jobs in its UK factories despite promising to safeguard them in takeover documentation.
“A privatised model is unlikely to be the most effective means of guaranteeing Channel 4’s current long-term and ambitious commitment to providing jobs and opportunity across the UK.”
It comes as Culture Secretary Oliver Dowden will warn today that “standing still is not an option” for Channel 4 amid a Government consultation into the privatisation of the broadcaster.
In a speech to the Royal Television Society Convention, Mr Dowden is expected to outline how the channel could continue to thrive even if it is sold, calling it “one of this country’s greatest assets”.
He is due to say: “Right now, Channel 4 is in a stable position. But I think too many people are fixated on Channel 4’s current situation. I’m much more concerned with its long-term future.
“I believe that if Channel 4 wants to grow then at some point soon it will need cash. Without it, Channel 4 won’t have the money to invest in technology and programming, and it won’t be able to compete with the streaming giants.”
He will say the money can either be raised “on the back of the taxpayer or it can come from private investment”.
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