The proposed privatization of U.K. broadcaster Channel 4 has been scrapped, according to a letter from the country’s Culture Secretary Michelle Donelan to Prime Minister Rishi Sunak.
The letter, dated Jan. 3 and leaked by The News Agents podcast on Jan. 4, instead proposes a package of reforms to support Channel 4’s long-term sustainability.
“Last year’s consultation on C4C’s future ownership model identified risks to the corporation’s long-term sustainability. The view of my predecessor, and the government of the time, was that selling C4C was the right solution to meet these challenges. However, after reviewing the business case, I have concluded that pursuing a sale at this point is not the right decision and there are better ways to secure C4C’s sustainability and that of the U.K. independent production sector,” Donelan wrote in the letter.
“Indeed, C4C’s role in supporting growth in our independent production sector, a sector which is currently worth around £3 billion [$3.6 billion] to our economy, would be very disrupted by a sale at a time when growth and economic stability are our priorities.”
SCOOP: Letter from Culture Secretary Michelle Donelan to Rishi Sunak confirming her recommendation is that Channel 4 privatisation does NOT go ahead. Says there are “better ways to ensure C4’s sustainability.”
— Lewis Goodall (@lewis_goodall) January 4, 2023
Direct opposite of what the Johnson government said. pic.twitter/KOH78NVJjt
Donelan instead suggests a sustainability package, elements of which include legislation to introduce a new statutory duty for the C4C board to promote the long-term sustainability and success of the business alongside its existing remit obligations and working with C4C to agree updated governance structures that assure the government of C4C’s sustainability.
Donelan also laid out plans to legislate to give C4C the flexibility to make some of its own content and “diversify its revenue more effectively, should it wish to do so.” The C4C business model outsources production to a series of independent companies and revenues are reliant on advertising, which the letter said is in long-term decline.
“The government will work closely with the independent production sector to consider what steps are necessary to ensure that Channel 4’s important role in driving investment into the sector especially in the newest, smallest and most innovative producers – is safeguarded,” the letter stated. “This will be a gradual change and safeguards will include increasing the level of Channel 4’s independent production quota, which is currently set at 25 percent of programs; and potentially introducing specific protections for smaller independent producers. I will also work with ministerial colleagues at HM Treasury to consider our approach to future requests to increase C4C’s borrowing limit beyond the current £200 million limit, if the proposals support C4C’s long-term sustainability.”
In 2022, Donelan’s predecessor Nadine Dorries set in motion Channel 4’s privatization and Sunak, during his Prime Ministerial leadership bid, confirmed that the sale process would go ahead.
Dorries has not taken kindly to the news.
Three years of a progressive Tory government being washed down the drain. Levelling up, dumped. Social care reform, dumped. Keeping young and vulnerable people safe online, watered down. A bonfire of EU leg, not happening. Sale of C4 giving back £2b reversed. Replaced with what?
— Nadine Dorries (@NadineDorries) January 4, 2023
A spokesperson for the the U.K.’s Department for Digital, Culture, Media and Sport (DCMS) told PvNew:“We do not comment on speculation. The DCMS Secretary of State has been clear that we are looking again at the business case for the sale of Channel Four. We will announce more on our plans in due course.”
Channel 4 declined to comment.
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