Government looks at C4 privatisation to fill £150m funding hole

by Staff, Brand Republic 20-Oct-08, 08:55

LONDON - The Government is considering privatising Channel 4 to help it resolve its financial shortfall, which could be as high as £150m a year.

According to a report in The Times this morning, Lord Carter of Barnes, the newly-created communications minister, is to hire a bank to help value the publicly-owned broadcaster.

The privatisation of Channel 4 is one option Lord Carter will consider as part of his Digital Britain review, which will decide the fate of the channel that is suffering from a declining TV ad market and funding uncertainty.

Last month, the broadcaster announced plans to axe 150 jobs to save £100m over this year and in 2009, and two weeks ago Channel 4 pulled the plug on its planned digital radio venture, 4 Digital Group, which also included BSkyB, Carphone Warehouse, UTV, Bauer Media and UBC as shareholders.

The closure of the venture, which was supposed to launch this year, is likely to lead to the loss of several senior executives including former BBC Radio 5 Live controller, Bob Shennan, who was hired as director of radio, and Simon Daglish, former GCap Media national sales director, hired at the end of August as commercial director.

Only last month, Channel 4 said its digital radio venture was on track, although the rollout had been scaled back by a third with only one of three of its originally planned stations, E4 Radio, confirmed.

Ofcom has been examining the future of Channel 4, but it can not make the legal changes to its status which might now be needed to safeguard its future.

Other options being considered are giving the channel a slice of the BBC licence fee or raising more public cash. However, The Times says that the involvement of Lord Carter is an indication that the favoured option is privatisation or a partial share sale.

Lord Carter told the paper that while Ofcom's view "was an important one", it was not the only advice he would consider.

Comments

Raoul Pinnell - 20/10/2008

My understanding is that: The public is not aware that C4 recieves significant funding from them - the tax payer. The case to release the public from this burden is high. The public - mostly watches C4 - US imports/mass entertainment programmes - therefore the case for maintaining subsidy for 'original programme production' is low.