Channel 4 Set For Valuation Ahead Of Possible Sell-Off
The Government is understood to be preparing a valuation of Channel 4 as the Treasury gives further consideration to a sell-off of the state-owned broadcaster, further fuelling rumours of a merger with Five.
Government officials are understood to have consulted several city banks over the valuation process, giving a clear indication that privatisation for Channel 4 is a likely prospect, with the broadcaster estimated to be worth roughly £1 billion.
The move follows speculation earlier this year that a merger between Channel 4 and Five was on the cards, with then Channel 4 chief executive Mark Thompson confirming the rumours by stating that exploratory talks had been held between the two broadcasters (see Channel 4 Confirms Merger Discussions With Five).
The latest revelations will further intensify industry gossip at a busy time for Channel 4, which last week announced the appointment of Andy Duncan, former BBC director of marketing, communications and audiences, as its new chief executive (see Channel 4 Appoints Andy Duncan As Chief Executive).
Speaking at his first press conference as head of Channel 4, Duncan hinted that the broadcaster’s future may involve such a merger with Five or another commercial company. He said: “I have a genuinely open mind on what the right strategy is going forward, including partnerships, alliances and so on” (see Duncan: Channel 4 Could Survive Digital Future As It Is).
A report in today’s Observer speculates that a merger between Channel 4 and Five could dramatically reduce costs, with merged back office functions or a consolidated advertising sales house. Alternatively joint scheduling agreements could allow both stations maximise advertising revenues by reducing competition, however, such a merger would require an act of parliament.
A merger could bolster Channel 4’s success against multi-channel competitors, but co-operation with Five is by no means the only option open to the broadcaster, with any sell-off expected to be held as an auction, opening the way for ITV or BSkyB to take control of the company (see Channel 4 Auction Could Scupper Five Merger).
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