Channel 4 could face privatisation
Lord Carter is expected to make four proposals to solve Channel 4’s funding crisis at the end of January to coincide with Ofcom’s public service broadcasting review.
The new minister for communications, technology and broadcasting will outline his suggestions when the interim report of his Digital Britain panel is published, with similar recommendations to Ofcom, according to reports.
Carter’s report is expected to consider four options for the future of Channel 4, which are thought to be privatisation, a merger with Channel Five, a joint venture with BBC Worldwide, or further public subsidy to keep it afloat.
However, the BBC Trust chairman Sir Michael Lyons has rejected the idea of a merger between BBC Worldwide and Channel 4, saying it is a “fanciful idea that distracts from what is actually doable” (see BBC Trust Chairman hits back at Worldwide & Channel 4 merger idea).
Last week, Lyons said: “The proposition of Worldwide being taken away from licence fee payers who have invested in it is pretty extraordinary.
“Worldwide depends on the BBC brand and the stream of intellectual property rights. Take them away and it is not the same company. This distracts the sector from finding some solutions rather than [what is] pie in the sky,” he added.
“There are no discussions going on within the BBC about the transfer of Worldwide to Channel 4,” he confirmed.
However, the BBC has offered the idea of a limited operational partnership with Channel 4 in order to use Worldwide’s “global scale and product diversity” instead.
Outright privatisation of Channel 4 has also come across strong opposition, with the commercial broadcaster and Ofcom both understood to be against the idea.
The broadcaster is only bringing in around £600 million in the current economic climate, which could also factor against a complete sell-off.
Channel Five’s owner RTL is also looking at a potential merger with Channel 4, following a similar proposed deal between the two broadcasters four years ago (see Rumours of RTL takeover of Channel 4).
However, Channel 4’s chief executive Andy Duncan is said to be against the idea that he originally blocked in 2004 when he replaced Mark Thompson.
The Digital Britain action plan, billed by the government as a bid to “secure the UK’s place at the forefront of innovation, investment and quality in the digital and communications industries”, was established in October and is being led by Carter and a panel including figures from government, regulators and industry.
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