The Sunday Times - UK (2022-04-10)

The Sunday Times April 10, 2022 3

900

Channel 4 staff

£69m

2020 profit

reinvested

£4bn

Possible hit to

independants

based on how they would perform on its

All 4 streaming platform. The plan was to

generate 30 per cent of revenues from

digital by 2025, up from 20 per cent at the

time. All 4 is the UK’s biggest free stream-

ing service, with 14,500 hours of content.

The shift appeared to be paying off.

Channel 4’s revenue was down slightly in

2020 at £934 million but it reported a

record surplus of £69 million. As a non-

profit, all of that is reinvested.

Another Mahon change was to move

operations out of London. As the com-

pany looked to shake off its reputation in

Westminster as being run by “the liberal

elite”, Mahon opened a new HQ in Leeds.

BUYERS LINE UP

Potential buyers are combing through

the numbers ahead of the formal start of a

sale process. As reported by The Sunday

Times last October, bankers at Credit

Suisse and Robey Warshaw are advising

ITV on options around Channel 4 (the

Telegraph said last week it expressed an

interest with ministers about making a

bid). However, such a move would face

serious competition concerns, given that

ITV and Channel 4 control about 70 per

cent of the UK’s TV advertising market.

Comcast-owned Sky has a 27 per cent

share of the UK’s TV ad market and will be

among the likely bidders when the sale

process kicks off. Interest from across the

Atlantic is also likely: Channel 5 owner

Paramount and Discovery, now merging

with WarnerMedia, are also in the frame.

said that there was no reason why Chan-

nel 4’s relationship with regional inde-

pendent producers should change, add-

ing: “Other broadcasters spend as much,

if not more than it, on indie productions,

including ITV, which spends far more on

shows made in the north.”

EXISTENTIAL CRISIS

For years the spectre of privatisation has

loomed over Channel 4, which was

founded by the Thatcher government in

1982 and broadcast an episode of Count-

down as its first show. Successive govern-

ments have weighed a sale before back-

ing away. But in recent years, Mahon,

who took charge in 2017, has faced new

challenges. The rise of the likes of Netflix

and TikTok has created an existential cri-

sis for the channel, once broadcaster of

choice for teens and twentysomethings.

Channel 4 still attracts a larger propor-

tion of young viewers than rivals. In

2020, nearly 16 per cent of its terrestrial

and streaming share was 16 to 34-year-

olds; its overall share was 10.1 per cent.

Supporters argue it screens shows that

would never see the light of day on more

commercially-driven channels. In 2020,

Channel 4 produced 2,281 hours of origi-

nal content, including 101 hours of origi-

nal drama. But that is well down on 2010,

when it aired 3,998 hours of original pro-

gramming, 191 hours of it drama.

When Covid hit, Mahon, whose pay

topped £990,000 in 2020, launched a dig-

ital-first strategy, commissioning shows

Nadine Dorries,

above, has fired

the starting gun

on a sale of

Channel 4. The

broadcaster

screens shows

such as Kirstie

and Phil’s Love It

or List It and The

Great British

Bake Off

Beneath Dover’s chalk cliffs,

two policemen direct a

stream of lorries away from

the ferry terminal in the hope

of easing traffic, while on the

M20, columns of white HGVs

stand motionless. Less than a

mile from the queue is the

root cause of the chaos: three

P&O ferries moored up in the

port, sitting idle.

“The traffic was a mess — it

must have stretched back 30

miles,” said lorry driver John

James, who joined the jam

at Maidstone at 7am on

Tuesday morning and

did not reach the port of

Dover until 1am on

Wednesday. “P&O have ...

messed up Dover royally.”

The sudden loss of the

three P&O ships, which

normally take up to 1,200

lorries across the Channel

each day, has coincided

with surging demand from

Easter holidaymakers. At the

same time, a post-Brexit

customs IT system for HGVs

has gone offline due to a fault,

and is not due to return to full

service until Monday.

Roads in this part of Kent

are clogged from the strain.

Last weekend, Dover had

30,000 customers — a

threefold increase on the year

before, when traffic was

down during Covid. But rising

demand is being serviced by

fewer ferries: just 28 sailings a

day, down from a typical 50.

The Port of Dover said it

was operating at about two-

thirds of usual capacity. More

than 4,500 HGVs are stuck on

the M20, which usually has

capacity for 2,000.

“We are trying to use any

port but Dover,” said Chris

Day, 49. The transport

haulage manager said that

Operation Brock, a police

initiative to move HGV traffic

away from the town, had

made life worse for drivers.

But he was most critical of

P&O, which fired 800

workers without notice last

month in order to hire

cheaper overseas staff.

Training those recruits, and

earning new safety

certificates from the

authorities, has left its ferries

on the Dover-Calais route

temporarily out of action. It is

unclear when they will

resume.

“Their decision has had a

massive effect on haulage

companies, and that in turn

has also affected tourists,”

said Day. “It is difficult for us

6 Politically, Musk has described himself as a “moderate” and

“half-Republican, half-Democrat”. He has denied being an

“extreme libertarian”, but he has implored government “to get

out of the way” of entrepreneurs and minimise wealth taxes.

And he has been critical of Twitter’s moderation of users. Last

month, he said: “Given that Twitter serves as the de facto

public town square, failing to adhere to free speech...

fundamentally undermines democracy.”

Musk may want Agrawal to reduce content

moderation and unwind some of the steps that

his predecessor, Jack Dorsey, took to clamp

down on hate speech. That may be unpopular

with the advertisers upon which Twitter

depends for most of its revenue. And there

remains the issue of whether free speech

extends to Twitter’s other most famous

user: the now-banned Donald Trump.

6 Aside from Tesla, Musk is sending rockets and satellites into

space via SpaceX, developing underground transport with The

Boring Company, and seeking to wire our brains to computers

with his Neuralink venture. In theory, all of those tasks are more

challenging than making Twitter a sustainable, profitable

company. Then again, Twitter has plenty of problems.

The company has been in a slump: in the year prior to Musk’s

stake-buying, the shares had fallen 45 per cent, while its market

value of $37 billion compares to $606 billion for Facebook

owner Meta. Twitter turned over $5 billion last year and made a

$221 million loss, amid doubts that it can hit its growth targets.

Agrawal declared Musk was “exactly what we need ... in the

boardroom to make us stronger in the long term”. But the

likelihood is that his chaotic presence will do little to stabilise a

board that was fending off feared activist investor Elliott two

years ago. The saving grace for Agrawal is that the mercurial

Musk’s attention is going to be split in many directions.

6 Musk has made little secret of his

disdain for the US markets regulator, the

Securities and Exchange Commission.

The dispute dates back to 2018

and a now-notorious tweet in

which he claimed he had

secured funding to take Tesla

private at $420 a share. The

SEC concluded that funding

was far from secured; Musk

was fined $20 million and

consented to having some of his

tweets screened by a lawyer before

posting. He has subsequently claimed

he was “forced” into the agreement.

The SEC is looking at another incident

in which Musk polled his followers about

whether he should sell Tesla stock. He

has hit back at the regulator for its

“unrelenting investigation” into him and

his company. The root cause of

the row appears to be his belief

that the SEC does not do

enough to clamp down on

short-sellers.

By buying a stake in Twitter,

the theory goes that Musk is

cocking a snook at the SEC.

Certainly regulators may well take

a dim view of an apparent delay in

declaring the stake, or of Musk initially

saying he would be a passive investor

before changing his filing to say he

would be active, after joining the board.

HE CHAMPIONS FREE SPEECH HE FANCIES TORMENTING REGULATORS HE LIKES A CHALLENGE

Chaos rules over the

white cliffs of Dover

Traffic is clogging

the port and the

town — and don’t

mention P&0

Ferries, writes

Laith Al-Khalaf

Insolvency Service has

launched a criminal inquiry

into P&O’s actions and the

RMT union has called for

“experienced” staff to be put

back on its boats.

“At the moment, the delays

are causing major issues to the

Dover economy and to Kent as

a whole,” said Toby Howe of

the Kent Resilience Forum, a

coalition of local authorities,

public services and health

officials. “Add to that the

awful weather... that has

prevented ships from sailing —

it has been a lot of factors.”

Howe said the authorities

were hoping to concentrate

traffic mainly on the M20

from London — away from the

town. But he warned that

lorries using GPS systems, in

the hope of avoiding delays by

taking back roads, were

adding to the problem. On

Thursday, a vehicle hit a

railway bridge on a side street.

The authorities’ response

has prompted infighting

among local politicians. Kevin

Charles at Dover council said

that locals had become a

“sacrifice” to the disruption.

“I have made it clear to the

Kent Resilience Forum, Kent

police and Kent county

council that we will not

tolerate another weekend of

gridlock in Dover,” he said.

Local businesses are also

feeling the pain. Sharon

Aylet, 56, who runs Buffers

café near Dover Priory

station, said she was unable

to open her shop on Saturday.

“[The queues] stretched all

the way back to Folkestone.

The baker couldn’t make it

through the traffic, so I had to

just close up for the day.”

Andy Stewart, who owns a

plumbing company, said the

lorry traffic was also affecting

his business. “There’s never

any diesel because they

always pile through [and fill

up],” he explained. “They’re

not even supposed to come

through the town, but as soon

as the police are away, they go

wherever they want.”

The 52-year-old said he

now sets off early for

deliveries and takes longer

routes to customers. “That’s

the issue in Dover — you’re

forced to adapt.”

to plan for and indicate [to

customers] when our

deliveries will arrive.”

While companies shifting

goods with long shelf lives are

trying to use other ports to

avoid delays, those that

deliver more perishable stock

rely on the “short straits”

route across the Channel to

move goods quickly. The

limited number of “roll on,

roll off ” ships, which can

carry wheeled cargo, also

creates difficulties.

Rival operators such as

DFDS and Irish Ferries have

tried to take up P&O’s slack.

DFDS has been packing

hundreds of lorries into its

ships in 40 minutes to speed

up turnaround times, but it

suffered a blow last week

when one of its vessels hit a

harbour wall. The firm is now

at full capacity again, but last

week it announced it would

no longer be able to take P&O

customers to France.

John Lansdown, 39, a chef

at P&O for 15 years before he

was sacked three weeks ago,

called its move “inexcusable”.

He is the only one of the

former P&O workers to refuse

to sign a non-disclosure

agreement in return for

compensation. He is suing it

for £76 million, which he said

he would use to set up a trust

for seafarers.

“Why should the people in

Dover and surrounding areas

have this put upon them

because of bad business

decisions?” he said. The

1,200

P&O’s daily lorry count

33%

Fall in capacity at Dover

18

Hours of delays for lorries

On the M20 in Ashford at Kent, lorries are going nowhere

There are left-field bidders too, such as

Miroma, whose stable of companies

includes former Manchester United foot-

baller Gary Neville’s Buzz 16 Productions.

Miroma, one of whose advisers is former

Channel 4 boss Lord (Michael) Grade, has

engaged Rothschild. Grade will have to

step aside given his appointment as chair-

man of Ofcom. Founder Marc Boyan said:

“We would be stupid not to be looking.” A

stock market float is also on the table.

As well as the publisher-broadcaster

model, there are other factors for buyers

to consider. Will Channel 4 still have to

appeal to minority and diverse audien-

ces? Will it maintain its public-service

remit to deliver news, UK-originated pro-

grammes and “distinctive content”?

A senior insider warned that a buyer

could sign commitments to preserve

news and current affairs, but then cut

them back after the undertakings have

lapsed. “Before you know it, Channel 4

News could be unrecognisable,” they said.

Jane Muirhead, who founded Glasgow-

based Raise the Roof Productions with

property experts Kirstie Allsopp and Phil

Spencer, employs 18 permanent staff but

used 400 freelancers last year. “What are

we saying to the next generation of entre-

preneurs?” Muirhead, 61, asked. “We’re

telling young people, ‘You can work in TV,

but don’t ever have any ambition to start

your own company.’ ”

Read Alex Mahon’s comment at

thesundaytimes.co.uk