26 Friday April 8 2022 | the times
News
IN THE TIMES TOMORROW
DAVID WIGHTON
Is the government
looking at inflation
the wrong way?
MAIN PAPERBUSINESS MAGAZINE SPORT
WHAT KALEB
DID NEXT
Meet the star of
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DICKINSON
On the trail of
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MAIN PAPERChannel 4 attempted to ward off
privatisation by warning ministers that
it would deal a £3 billion blow to the
economy and put independent produc-
ers out of business.
The broadcaster presented Nadine
Dorries, the culture secretary, with
documents laying out the drawbacks of
a sale. The papers, seen by The Times,
set out an alternative to privatisation,
which would have given Channel 4
access to private capital and preserved
its public remit.
Dorries rejected the proposals this
week when she announced plans to priv-
Channel 4 claims privatisation would cost £3bn
Jake Kanter, Henry Zeffman atise Channel 4 in the biggest sale of a
state asset since the Royal Mail. Tory
backbenchers, celebrities and media
trade bodies united in condemnation.
Channel 4 warned that there were
“significant risks” associated with priv-
atisation and that ministers would not
make as much money as they predict.
Channel 4 said the “gross value
added” to its supply chain would be
£3 billion lower over the next decade if
it was sold. Channel 4 will be able to
make its own programmes for the first
time, meaning less money will flow into
the independent production sector.
Up to 60 production firms could go
bust, Channel 4 claimed, and there
would be 32 per cent fewer jobs in its
supply chain. The government’s level-
ling-up agenda would also be harmed,
the assessment said. It said up to £2 bil-
lion in gross value added would be lost
from the nations and regions, where
Channel 4 commissions content.
Analysis from Alvarium, a merchant
banking firm engaged by Channel 4,
showed the broadcaster was valued at
£500 million, assuming that ministers
stand by plans to protect its public
service remit. Government sources
suggest a near-£1 billion price tag.
“The government faces a trade-off
between a one-time revenue injection
of c.£0.5bn from privatisation and aseries of significant risks associated
with privatisation,” Channel 4 said in a
document shared with ministers on
March 1. Channel 4’s vision, 4: The Next
Episode, said it would establish a joint
venture vehicle with a third-party
investor giving it access to additional
funding. The “intellectual property
joint venture” would aim to invest £200
million a year into programming, rising
to £300 million by 2030. In return,
Channel 4 and the investor would likely
secure access to content rights.
Ministers were not prepared to have
the vehicle’s debt on their books. The
government said privatisation will un-
leash Channel 4 from public ownershipwith proceeds used to train a new gen-
eration of TV sector workers.
The Department for Digital, Culture,
Media and Sport said: “We carefully
considered these proposals from Chan-
nel 4, which rightly set out that signifi-
cant new tools and changes are re-
quired for it to be able to continue to
thrive in a rapidly-changing media
landscape. That included a proposal to
access private capital and for Channel 4
to increase its content ownership. We
agree that these are some of the right
changes, but believe they can best be
delivered through a change of owner-
ship rather than a risk to the taxpayer.”
Channel 4 declined to comment.