Any potential merger plans being drawn up between Channel 4 and Five could be derailed if the Government insists on state-owned Channel 4 being auctioned off to the highest bidder.
A Government source, quoted by
The Business, stated: “It’s difficult to conceive of a way in which you could privatise a public corporation without some sort of open tender process.”
Last month Channel 4’s chief executive, Mark Thompson, confirmed that merger talks had taken place between the two broadcasters and that Channel 4’s board of directors had been asked to appoint financial advisers to explore the logistics of a potential deal (see Channel 4 Confirms Merger Discussions With Five).
Channel 4 is a public corporation and any change to its ownership would need to be sanctioned by law. The broadcaster has no shareholders and is effectively Government property, worth approximately £2 billion.
Broadcasting minister, Lord McIntosh, told The Business that he would be ‘surprised’ at any move by the Treasury to make the necessary changes in law that would end Channel 4’s classification as a public corporation.
Ofcom has distanced itself from the debate surrounding the broadcaster’s future. A spokeswoman for the communications watchdog said: “If Channel 4 wants to consider its future, that’s for it to decide. We would only get involved if there was a change in primary legislation and if the Secretary of State for Trade and Industry decided that it was in the public interest.”
ITV has also reportedly stated interest in buying Channel 4 – a prospect which, while dismissed by many at the time, now looks increasingly viable should the Government insist on a competitive auction.
