Privatisation off the table for Channel 4 and EBC

5th January 2023

The UK government is to scrap plans to privatise Channel 4, while Brazil’s new government has removed the national broadcaster, EBC, from its privatisation programme.

In a positive start to the year for public broadcasting worldwide, plans to privatise two publicly owned media organisations – one British and one Brazilian – have been shelved.

UK

Channel 4 was due to be privatised under Boris Johnson’s administration. However, the current Culture Secretary, Michelle Donelan, has now recommended the channel remains under public ownership.

“Pursuing a sale at this point is not the right decision and there are better ways to secure C4C’s [Channel 4 Corporation] sustainability and that of the UK independent production sector,” Ms. Donelan wrote, according to a leaked copy of the letter she sent to the Prime Minister, Rishi Sunak. “Indeed C4C’s role in supporting growth in our independent production sector, a sector which is currently worth around £3 billion to our economy, would be very disrupted by a sale at a time when growth and economic stability are our priorities.”

SCOOP: Letter from Culture Secretary Michelle Donelan to Rishi Sunak confirming her recommendation is that Channel 4 privatisation does NOT go ahead. Says there are “better ways to ensure C4’s sustainability.”

Direct opposite of what the Johnson government said. pic.twitter.com/KOH78NVJjt

— Lewis Goodall (@lewis_goodall) January 4, 2023

However, in the letter Ms. Donelan suggested there were still legislative changes which should be introduced to ensure the broadcaster remains competitive, relevant, and able to adapt to the changes of the digital streaming age. According to the government press release, there would be a relaxing of the channel’s status as “publisher broadcaster”. Currently, that status effectively prevents the broadcaster from making and owning the content it features. Ms. Donelan said that allowing Channel 4 to make and own its content would provide greater commercial flexibility at a time when its main income stream comes from linear TV advertising, which is in long-term decline.

Meanwhile, she has also proposed improving governance and long-term strategic thinking at the broadcaster to ensure it is futureproof.

This is a significant and encouraging development. In 2022, the Public Media Alliance (PMA) responded to an inquiry by the House Lords stating its belief that the sale of Channel 4 would serve no economic, cultural or societal benefit, and indeed would be to the detriment of audiences who are well-served by the diverse content the broadcaster produces.

“Pursuing a sale at this point is not the right decision and there are better ways to secure C4C’s sustainability and that of the UK independent production sector” – Michelle Donelan, UK Culture Secretary

Furthermore, privatisation would have a substantial impact on the UK production sector. Channel 4’s role investing in small and medium sized production companies provides enormous opportunity not found elsewhere in the UK creative economy. Allowing the broadcaster to start making its own content does provide some complications when it comes to how it might impact the channel’s investment in the production sector. However, Ms. Donelan has stated that work would be undertaken to safeguard this.

Ultimately, providing the channel with greater flexibility to find new or increased revenue streams – Ms. Donelan also suggested increasing the broadcaster’s borrowing limit beyond £200 million – is welcome and much needed at a time of great change in the market.

The decision has been welcomed by Channel 4. In a statement, CEO Alex Mahon sad “I am personally delighted that we will be able to do more, making positive change for the people that others don’t fight for. We will move faster, invest more, take more risks, break down barriers and push boundaries; getting up to do that every day is an utter privilege for those of us lucky enough to work at Channel 4.”

Brazil