The Times - UK (2022-04-09)

52 Saturday April 9 2022 | the times

Business

5

T

he privatisation of Channel 4

is expected to attract interest

from as many as 40 prospec-

tive bidders, ranging from

American pay-TV giants to

rival British broadcasters eager to gain

an insight into the secrets of its success.

Ministers are preparing to use the

forthcoming Media Bill to kick-start a

sale of the broadcaster, which analysts

predict could bring in up to £1.5 billion

for the Treasury.

“Everyone will want to look under

the bonnet of this miracle company and

understand why it produces so many

prizes,” Claire Enders, the founder of

Enders Analysis, the media research

company, said.

Channel 4 was created 40 years ago.

It has a higher UK audience than Net-

flix, despite the fact that the streaming

service is spending about 20 times

more on original content, according to

Enders. Last year, it reported record

revenue of £1 billion.

A former Goldman Sachs banker has

been convicted by an American jury

of conspiring to violate an anti-

corruption law in connection with

the $4.5 billion embezzlement of

Malaysia’s state investment fund.

Roger Ng, Goldman’s former top

investment banker for Malaysia,

faces up to 30 years in prison after he

was found guilty on two counts of

conspiracy to violate the Foreign

Corrupt Practices Act and one count

of conspiracy to commit money

laundering.

Prosecutors said that Ng, 49,

helped Tim Leissner, his former boss,

to embezzle money from 1Malaysia

Development Berhad (1MDB), laun-

der the proceeds and bribe officials to

win business for Goldman.

Ng had pleaded not guilty. His law-

yers claimed that Leissner, who

admitted to similar charges in 2018

and agreed to co-operate with prose-

cutors, falsely implicated Ng in the

hopes of receiving a lenient sentence.

Leissner gave evidence at Ng’s trial.

Malaysian and American investi-

gators have estimated that about

$4.5 billion was stolen from 1MDB in

one the world’s largest financial scan-

dals. The sovereign wealth fund was

set up as a vehicle for economic de-

velopment but the money is thought

to have been used to buy artwork, in-

cluding paintings by Van Gogh and

Monet, properties in New York and

London and to fund The Wolf of Wall

Street, a movie.

Ng is the first person linked to the

scandal to face trial in the US. His

trial in Brooklyn, New York, lasted

almost two months. Jurors started to

deliberate on Tuesday. Prosecutors

have said that Goldman helped

1MDB to raise $6.5 billion through

three bond sales, only for $4.5 billion

to be diverted to government offi-

cials, bankers and their associates

through alleged bribes and kickbacks

between 2009 and 2015. Goldman

paid a fine of some $2.9 billion and its

Malaysian subsidiary pleaded guilty

in October 2020 to violating federal

anti-bribery law.

The scheme was “obscene in its

greed”, the US attorney Breon Peace

said yesterday. “Today’s verdict is a

victory for not only the rule of law,

but also for the people of Malaysia,”

he added. “The defendant and his

cronies saw 1MDB not as an entity to

do good for the people of Malaysia,

but as a piggy bank to enrich them-

selves with piles of money, siphoned

from the fund.”

Callum Jones

US Business Correspondent

Ex-banker guilty over fund scandal

Bankers at JP Morgan have

been brought in by the gov-

ernment to advise on the

prospective sale. A con-

sultation on the privati-

sation closes on Septem-

ber 14. Once the planned

sales process reaches se-

rious bids, the number

of interested parties will

depend on factors such as

whether the government will

relax rules around its remit,

such as an existing restric-

tion on producing its own

content.

Here are some of the

companies expected

to consider entering

the race:

itv

Britain’s

largest

free-to-air

Privatisation of the broadcaster after it made record revenues will pique the

interest of heavy hitters, report Louisa Clarence-Smith and Ashley Armstrong

of my list of buyers. Unlike ITV,

Channel 4 doesn’t have a pro-

duction studio. Rather than go

to Channel 4, it would look to

buy production companies that

Channel 4 uses.”

discovery

Industry sources anticipate a

return of interest in Channel 4

from Discovery, the American

pay-TV company said to have been be-

hind a £1 billion bid for the broadcaster

in 2016.

Discovery is in the process of

merging with WarnerMedia, its larger

rival behind the CNN and HBO net-

works. It is thought that any bid from

broadcaster would be a serious con-

tender in any bidding process for Chan-

nel 4. “It’s too important a strategic as-

set for them not to engage,” Roddy Da-

vidson, an analyst at Shore Capital, the

investment group, said.

Synergies from a deal would include

sharing investment in content, techno-

logy and digital platforms. An acquisi-

tion of Channel 4, which has outper-

formed rivals including ITV and Sky

Atlantic with its online performance,

also could boost ITV’s “digital-first”

strategy as it focuses on revamping its

streaming offering to retain viewers.

A British-based operator is likely

to be favoured by ministers and

might be given a shorter review pro-

cess. On the other hand, the biggest

obstacle to any deal would be com-

petition concerns. Together, ITV

and Channel 4 control almost half of

all advertising watched on television

and more than 70 per cent of TV ad-

vertising revenues, according to End-

ers Analysis. “The larger group would

become an even more formidable ne-

gotiator with platforms and evolutions

in the structure of the TV advertising

market conceivably would be stulti-

fied,” Enders said.

netflix

American streaming companies are

expected to take a look at Channel 4, if

only to consider how it still manages to

outperform them in UK

viewer numbers while oper-

ating on a much smaller bud-

get.

However, Netflix is moti-

vated to buy content to feed

its direct-to-consumer model

and Channel 4 doesn’t own

the content it commissions.

Any interest from Netflix is

likely to be contingent on the

government relaxing existing

restrictions on Channel 4

making its own content or ac-

quiring production compa-

nies. The Communications

Act 2003 prevents Channel 4

from making any programmes

itself without Ofcom’s consent.

Netflix also probably would be put off

by the political fallout from the sell-off of

a prized British asset to a foreign buyer.

Ben Barringer, a media analyst at Quilt-

er Cheviot, the investment manager,

said: “I would put Netflix at the bottom

o C d t b C d I r

fr

Alex Mahon, Channel 4’s

chief executive, above left,

oversees a broadcaster behind

television hits such as

Gogglebox, above, Formula One

motor racing coverage and The

Big Fat Quiz of Everything

The would-be buyers set to