Home Broadcasting Grade and ITV frontrunners to buy C4: report

Grade and ITV frontrunners to buy C4: report

by RXTV-newsdesk
Channel 4 London HQ

A business led by Lord Michael Grade and ITV have been named as the two frontrunners to buy Channel 4. A consultation over the future of the state-owned broadcaster launched in the summer.

Lord Grade has extensive experience in broadcasting, having led Channel 4 and been chairman at the BBC and ITV. He now serves as chair of Miroma, a company controlled by media entrepreneur Marc Boyan. According to The Sunday Times, who named Lord Grade as a frontrunner, bankers are now assessing Channel 4’s finances on behalf of Miroma. Meanwhile, bankers at Credit Suisse are advising ITV over its options, according to the report.

Lord Grade was responsible for Channel 4 in the late 80s and early 90s, as the service was spun-off into a separate corporation.

He sits on a panel advising ministers on public service broadcasting. He has previously called for Channel 4 to be reformed. None of the named parties have commented on the report.

How much would selling Channel 4 raise for the Government?

It’s expected that a sale of Channel 4 would bring in around £500 million. To put it in to contrast, that’s the equivalent of 1/34 of the Government’s stake in NatWest bank.

Do taxpayers ‘prop up’ Channel 4?

Former Culture Secretary Oliver Dowden previously suggested this was this case, when he asked why a granny in Stockport should underwrite investments [for Channel 4] to compete with the likes of Netflix.

In fact, Channel 4 last year posted a pre-tax profit of £74 million and does not receive money from taxpayers. The channel receives most of its money from advertising, but also licensing deals with platform operators and subscriptions for its premium All 4 service.

Will Channel 4 definitely be privatised?

It appears a foregone conclusion. The Government appears to want to sell of Channel 4 for ideological reasons rather than the financial reasons it cites.

It is unclear how selling Channel 4 to Miroma, itself a broadcasting minnow, would help the broadcaster compete with the likes of Netflix. For ITV, buying Channel 4 would remove a key competitor for ad revenue and viewers in the UK. It’s unlikely to have any global impact. Other potential buyers include Comcast (Sky) and ViacomCBS (Channel 5).

Wasn’t Channel 4 originally owned by ITV?

No. However, before the end of 1992, there was a closer link between Channel 4 and what was then a network of local ITV stations.

The former ITV regional stations were responsible for ad-sales and playout of the channel in their region. However, until 31st December 1992, terrestrial commercial broadcasters were technically contractors of the Independent Broadcasting Authority (IBA). The IBA allowed contractors to move programmes, such as schools TV and racing, to Channel 4. But at no point was Channel 4 actually owned by an ITV regional station.

Following legislative changes, Channel 4 became the responsibility of Channel 4 Corporation. Today, the corporation sits under the Department for Digital, Culture, Media and Sport (DCMS).

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