Channel 4 publishes privatisation alternative

Channel 4 has published its bold proposals put to the government as an alternative to plans for privatisation including sourcing outside private investment and a move from its Horseferry Road HQ to an expanded Leeds operation.

4: The Next Episode – Channel 4’s alternative proposal to privatisation were set out by chief exec Alex Mahon. Mahon said: “The last two years have transformed the profile of Channel 4’s audience and revenues, and significantly bolstered our net asset and cash position – allowing us to accelerate our strategy and invest in our future.

“There is much to applaud in the Government’s White Paper and they have clearly thought about some of the issues that we collectively face. In fact, we agree with Government on a number of things. The UK broadcasting industry does face immense challenges; that it’s vitally important to do everything we all can to ensure that audiences can continue to enjoy great British content that represents, reflects and celebrates in the incredible diversity of this nation; and that we nurture a successful independent production sector.

“However, the White Paper proposes some significant changes to the Channel 4 model and to its role as a key institution as part of the UK creative industries landscape. We also recognise that standing still in this ever-changing world is not an option. We developed a new vision, 4: The Next Episode, which represents our vision of what more Channel 4 can be and can do, while continuing to be owned by the British people.”

As part of its alternative proposal, Channel 4 said it would “leverage significant private capital into Channel4 for the first time, bringing £1bn of new British investment in British content by 2030.”

Channel 4 engaged external financial advisers, to develop an intellectual property joint venture (JV) proposition with an external investor as majority shareholder. The JV would “invest in British creative content, combining Channel 4’s commissioning
expertise, distinctive British flavour and ‘shop window’ for curated content with private capital.“

The “specialist financial partners” would be the majority investor, providing access to debt outside of the public sector balance sheet and the scale of the JV “would expand over time.” Channel 4 says that based on advice from external financial advisers “we estimate it could scale to £200m per annum (or £1bn over a 5-10-year cycle).”

Channel 4 said the plan would allow it to grow investment in the Nations and Regions, “providing a new source of investment in commissioning content from (often SME) production companies based in the Nations & Regions.” and that it would retain and propose that the Government “enshrines in licence our voluntary commitment to spending at least 50% of our relevant commissioning budget outside London.“

As part of its proposal, Channel 4 also said that it would accelerate the transfer of jobs from London to the Nations and Regions. “We opened our Leeds HQ at the end of last year and we have already met our commitment to base 300 roles outside of London by 2023. We want to
accelerate our commitment to levelling up by doubling our commitment on roles outside of London, growing to 600 roles by 2025.

The Horseferry Road HQ would be sold with Channel 4 “streamlining” its London presence “by creating a new London base that reflects our new ways of working. As we embrace hybrid working, and reorient our focus away from London to the Nations and Regions – a reorientation intrinsic to our existence in public ownership – Channel 4 may require a different scale London base.“

At the same time, the new Leeds base would be expanded “we would look to dramatically expand Channel4’s digital content production studio in Leeds– 4Studio.”

Channel 4’s proposals also focus on skills with the broadcaster saying it would work with partners to create “the first television school outside the southeast” and would massively ramp up training opportunities. “We have already committed to £5m of additional investment in 4Skills, enabling us to reach 15,000 people a year from 2022. Diversifying our revenue will enableus to grow this investmentto £10m per annum which we see as critical to addressing both the lack of capacity and the lack of diversity in the sector. This would increase the number of training opportunities offered to 20-25,000 a year – or 100,000 over a five-year period.”