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Who should buy Channel 4?

Who should buy Channel 4?

The UK Government is pushing ahead with the privatisation of Channel 4, much to the “disappointment” of the broadcaster.

Culture Secretary Nadine Dorries stated that she had “come to the conclusion that government ownership is holding Channel 4 back from competing against streaming giants” and that “a change of ownership will give Channel 4 the tools and freedom to flourish and thrive”.

The move has also drawn criticism from many, including ISBA, the UK’s largest advertising trade body, which noted the negative effect the sale may have on ad competition.

Phil Smith, ISBA’s director general, wrote in a statement: “[A] key concern of our members is the undue dominance in the TV advertising market that may result. At present, there are three TV saleshouses – owned by Channel 4, ITV, and Sky – involved in the buying and selling of advertising space. Were these to be consolidated, it would create undue dominance in the TV advertising market and reduce competition. For the market to be effective for both advertisers and consumers there needs to be competition.”

With the sale of Channel 4 comes the question of who will step in to buy.

The Media Leader asked our list of media commentators who they think should buy the public-service network, and what the future of Channel 4 might look like.

Broadcast/VoD consultant Stephen Arnell

“Ideally, well-heeled current and past Channel 4 executives should buy out the network – if they’re so passionate about it.

“Truly a case of putting their money where their collective mouth is. But that would also require a level of organisational expertise I suspect is wanting.

“Otherwise, STV could be the best of the bunch – but not at £1bn.”

Nick Manning, co-founder of Manning Gottlieb OMD

“If the decision to sell Channel 4 is highly questionable, then at least it is an opportunity to build on its heritage as a creative powerhouse which showcases the best thinking of the independent sector.

“Maybe its current output isn’t typical, but Channel 4 has brought us some of the most distinctive programmes of recent times.

“I would like to see another creative powerhouse take over this responsibility and there is no better candidate than HBO, owned by Warner.

“They could use Channel 4 as a conduit to the UK’s pool of talent to develop properties that have international appeal and provide the funding to break out of Channel 4’s over-reliance on low-cost, low-grade content with only domestic appeal.

“HBO has been the pre-eminent global TV player for many years and with the right approach it could build on this foundation while preserving Channel 4’s distinctive ability to create innovative programmes that can attract wider audiences.”

Jan Gooding, executive coach, chair of PAMCo and Given

“Selling has nothing to do with government ownership ‘holding Channel 4 back from competing against streaming giants’ and everything to do with politics. Ironical that its commercial model was conceived under the conservative party icon Lady Thatcher as the best of both worlds. Investing in the British creative industries and talent without costing the taxpayer a penny.

“But the truth is that government who claims to cherish free speech is thin-skinned about any criticism, and their boycotting of Channel 4 news is all you need to know to understand this announcement. Netflix and Amazon don’t carry news, so the comparison is significant.”

Brian Jacobs, founder of BJ&A Ltd., co-founder of Crater Lake and Co.

“Channel 4 as it exists today is the result of an innovative idea, combining in one model the best of the private and public sectors, brought to life by Jeremy Isaacs under the Thatcher Government.

“It’s virtually created the independent TV production sector, delivered ad revenue and cost the public purse nothing.

“Its streaming service is outstanding, it has innovated in TV audience measurement by bringing the importance of context to the fore.

“Who should buy it? No-one, it shouldn’t be for sale. No doubt it’s not perfect but selling it won’t improve it and will likely destroy its uniqueness.”

TMT analyst and investor Alex DeGroote

“It is a big question. You would probably be looking for any US English language broadcast company or maybe Australian broadcast company that does not have a platform in the UK at the moment. The number people are talking about is £1bn or $1.3bn dollars which is not that much money. Channel 4 is not as big as people think. It has 5% market share in the UK. To put that into context, ITV’s value is £3.3bn, or 3.3x Channel 4.

“The fact Channel 4 is a smaller company should increase the number of interested parties. There will be a lot of interest for two reasons. It’s a rare opportunity to get hold of a proven UK broadcast platform with a long history fairly cheaply. It could be great for an ambitious broadcaster when it is quite hard to get hold of broadcaster licenses. It could surprise people on the upside in terms of price and who is interested.

“It will be a really fascinating auction process. The whole process will take 6 to 9 months so by the end of the year, there will have a new owner for Channel 4.”

Lauren Ogúndèkó, chief digital officer and co-founder of Bicycle London

“I do not think ITV can buy Channel 4 legally. I think there are big players that are heavily for it internationally. Global investment, like the consortium between Discovery and somebody else coming together and having a proper foothold in the UK and looking to compete with Netflix and maybe Channel 4 is the easiest route into that.

“Maybe the Daily Mail General Trust and their investment arm, Global Radio and Reach looking at expanding their remit could come together in a collaboration.

“I know that The Independent is expanding into TV and maybe other news publishers could they all come together and buy it? That is another perspective.”

Ian Whittaker, media, martech, and tech analyst

“Perhaps one way to look at who should acquire Channel 4 is to look at what it is, namely the #2 commercial broadcaster operating mainly in the UK and with no production assets but with a strong brand franchise in its home market.

“From that standpoint, the three most logical buyers would be the consolidation plays i.e. ITV, Paramount (ViacomCBS), owner of Channel 5, and Sky.

“However, I can’t see Viacom buying given likely shareholders are likely to be lukewarm so that leaves the other two. I don’t think the regulators should block a consolidation deal because the world is changing fast and ITV is competing with the likes of Meta and YouTube for video advertising money.”

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