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Channel 4 bosses hit out over privatisation rumours uncertainty

Published 10/05/2016

Channel 4 chief executive David Abraham said the broadcaster had 'a record impact on audiences and the UK's creative sector' in 2015
Channel 4 chief executive David Abraham said the broadcaster had 'a record impact on audiences and the UK's creative sector' in 2015

Bosses at Channel 4 have attacked the Government over being kept in the dark about rumours the broadcaster may be privatised as part of a raft of major reforms to get better value for money for the taxpayer.

Channel 4 has unveiled a year of record revenues and a financial surplus of £26 million, with a marked growth of 30% in digital revenues.

But it is under pressure from the Government, which is considering options from full or part-privatisation to the sale of a minority stake, the payment of a dividend and the relocation to Birmingham or Manchester for the publicly-funded broadcaster.

Channel 4 chairman Charles Gurassa said the uncertainty around the Government's position was "not helpful".

He said: It's not for me to comment on the ultimate workings of government, but from a Channel 4 perspective what is not helpful is prolonged uncertainty.

"This review was first publicly discussed in the autumn, we are now in mid-May, and prolonged uncertainty is not good for any organisation.

"It's not good for our staff, it's not good for our business partners, it's not good for our advertisers, because they are all asking ... what is going to happen and what will the implications be?"

In a message to the Government, he said: "You have the information, we will happily engage on any options that you consider and give you our views, but it would be good to get to a position where we can move on and be clear whether there are going to be changes and what they are going to be."

Channel 4 has enjoyed a bumper year with revenues rising to a record £979 million in 2015, up from £938 in 2014, driven by strong advertising.

Digital revenues were up 30% to £82 million, from investment in the All4 platform and a growth in targeted advertising, and revenue from the Channel 4 sales house, which includes sales for broadcasters such as UKTV and BT Sport, stood at £1.17 billion.

Its viewing share also rose 1% across the country, rising to 8% in peak hours.

Channel 4, a publicly-owned broadcaster funded by advertising, says it put £629 million into programming last year, including a record £455 million on original content.

But it is under continued pressure from the Government to try to get better value for viewers.

Full privatisation is thought to be off the table, the Telegraph reported, but part-privatisation is thought to be among the options - which Channel 4 executives fear could be the slippery slope towards a full sale.

Speaking at the release of its annual report, chief executive David Abraham said the uncertainty about the broadcaster's future had become a "distraction".

He said: "We very much hope that our team and our staff and all of our great partners can just get on with our jobs at some point, because this has gone on for quite some time."

Mr Gurassa said there were no plans to meet with government, but executives were "always available to provide them with information and give them a view on any specific options that they develop".

And he said he would "ensure" the Government understands the consequences and implications of a change of ownership".

He added: "This organisation is a catalyst for bringing private capital into the creative industries in this country. That's what we do.

"We bring half a billion a year into small enterprises, enabling them to deliver and build creative content and go on then to sell that content around the globe.

"We are a brilliant organisation for attracting private capital, matching it with creative content entrepreneurs, and building a strong creative economy in the UK. It is a very good model."

On the possibility of Channel 4 moving to a regional headquarters, Mr Abraham said the broadcaster's revenue model is "absolutely centred" in London, but the critical point was how and where it spends its money.

He said 53% of this "is spent outside the M25. That's where we have real creative industry impact, is the way we spend the money".

He added: "One could hypothesise as to whether or not that activity, if it were to take place more outside London, what effect it might have on the regions, but we have not seen any concrete proposals."

And he rebuffed the idea the broadcaster was neglecting the regions, saying it had expanded its presence in Manchester and Glasgow.

He said: "To say that we are not participating intelligently and strategically in the broader agenda around regionalisation is not to reflect accurately the way the model actually works."

Fellow broadcaster the BBC also faces threats of ministerial interference into its independence, with a White Paper on the BBC charter renewal expected to be published as soon as Thursday.

But Mr Abraham said they "don't have anxieties" about their "cousins" at the corporation, saying the BBC was a "hugely important national institution" that they expect to continue to have a "very central role".

Channel 4 also announced a new 10-part series, one of its largest-ever drama commissions, bringing alive the work of sci-fi writer Philip K Dick, whose stories inspired films such as Blade Runner and Minority Report.

Chief creative officer Jay Hunt said the short stories, starring Breaking Bad's Bryan Cranston and produced by Ronald D Moore, would be reimagined for TV by Sony Pictures Television in Los Angeles exclusively for the broadcaster.

Ms Hunt said it proved there was a global appetite for Channel 4's approach to creativity.

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