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Auctioning off the free-to-air public service TV channel, valued at more than £1billion, will be the first significant privatisation since Royal Mail was sold in 2013. Culture Secretary Nadine Dorries has told Boris Johnson a private-sector takeover of the channel was the only way to guarantee its growth in a digital market dominated by the likes of Netflix and Disney+.
Her plan has been backed by the Cabinet and will form part of a draft media bill to be announced in the Queen’s Speech on May 10.
Whitehall insiders expect the sale to take place late next year and to be completed before the general election due in spring 2024.
Ms Dorries tweeted: “Channel 4 rightly holds a cherished place in British life and I want that to remain the case. I have come to the conclusion that government ownership is holding Channel 4 back from competing against streaming giants like Netflix and Amazon.
“A change of ownership will give Channel 4 the tools and freedom to flourish and thrive as a public service broadcaster long into the future.”
Ms Dorries and the Prime Minister are braced for a bitter row over the plan, with opponents expected to accuse the Tories of selling off a channel perceived by some as Left-wing. However, any new owners will be bound by the current public service broadcasting remit in force.
Although ministers will apply a “fit and proper” ownership test to bids, they are not ruling out foreign ownership or a buy-up by an existing media giant. They plan to put the proceeds into a “creative dividend” to fund new creative and media projects beyond London and the South-east, as per the Government’s “levelling up” agenda.
Whitehall insiders say Channel 4 will remain a public service broadcaster, along the same lines as ITV.
Ms Dorries believes the sale will allow it to set up a production house to compete with streaming giants.
The channel was launched in 1982 under Margaret Thatcher’s premiership to act as a “disruptor” in the analogue era dominated by ITV and the BBC.
Last night Channel 4 said in a statement: “It is disappointing that today’s announcement has been made without formally recognising the significant public interest concerns which have been raised. Recently, Channel 4 presented a real alternative to privatisation that would safeguard its future financial stability, allowing it to do significantly more for the British public, the creative industries and the economy, particularly outside London.”
