Would a privatised Channel 4 still be a serial risk-taker?

Would a privatised Channel 4 continue to support innovative programming, the independent production sector and the creative economy?

Roy Ackerman
5 January 2016
Sandy and Sandra Goglebox

Credit:Jude Edginton /Channel 4 TelevisonWhy do we care so much about Channel Four? After all, as a supplier (I’ve worked for Channel Four on and off since 1984, that’s, scarily, more than three decades) it can be truly infuriating. And, every few years, there’ll be an article in the broadsheets, or a session at Edinburgh, about how Channel Four ‘isn’t what it used to be’. But, isn’t that the point? It keeps changing and it’s always the same. It’s as much part of Britain and its media landscape as the BBC – and that’s saying something. It is the place where most of the new stuff happens - formats, styles of documentary, new shapes of different types of content. It’s one of the reasons networks all around the world see Britain as a player.

So, why is it important that - in spite of the absence of any reference to Channel 4 in the Chancellor’s Autumn Statement, rumours persist around Whitehall and beyond that the broadcaster is still being looked at for privatisation? 

Because its pattern of ownership allows it to be a consistent and serial risk-taker. I don’t believe that Channel 4’s public service remit to be innovative, experimental and distinctive, is compatible with the concept of private ownership. That’s why privatisation would not make any sense for the UK - economically, creatively or culturally. At Pulse Films, I am just one part of a multi-billion pound sector that would truly be decimated over time, if Channel Four became another network in private hands.

There’s loads one could change about Channel Four. But it is, at the very least, different. Even in the multi-channel age, it commissions programmes that other broadcasters don’t – and tries things that others don’t. Sometimes these things work. Sometimes they don’t. But at least they’re being tried, whether it’s the innovation of fixed rig documentaries or a ground-breaking new idea like Gogglebox.

In my own experience, I took them a show about finding an amateur opera star. Opera has always been ratings poison, but they backed it, funded it and put it out in prime-time. Operatunity became a hit, spawning lots of copies. But at the outset, it was a highly risky decision. Jamie Oliver, whose company I ran for six years, was able to create a global campaign against obesity – and a global food brand – because he was backed for more than a decade by Channel Four. He had to leave the BBC to be able to campaign in that way. 

The entity that is Channel Four is the opposite of what a shareholder-owned company would do. It is not just the risk. We know that shareholders are about profit. That’s the point about owning shares. That means they’re usually not keen on uncomputable risk. Supporters of privatisation point to the success of Hollywood studios. But we’re not in the huge market that is the USA and, Channel Four isn’t just about risk. It’s about remit. Diversity, supporting emerging small businesses. Fundamentally, it is about speaking truth to power, as the civil rights leaders once put it.

Nobody would say that Channel 4 commissioners aren’t aware of ratings. But a privately-owned Channel 4 – even with the remit ‘protected’, as the government say it would be - would change. Over time, the impetus to serve shareholders would narrow the creative choices.

As soon as you take a broadcaster out of public ownership, you limit the amount of influence the state, or the regulatory body, can exert upon it. At present, for example, Ofcom and parliament have the ability to remove the Chairman of Channel 4. A privatised broadcaster would not be subject to such constraints. Yes, Ofcom could fine a post-privatisation Channel 4 for ignoring its commitments to the remit, but who’s to say that they wouldn’t calculate that a fine of £5 or £10 million was worth paying if they were making an extra £30m from ditching the likes of prime time news?

Lord Puttnam, who knows a thing or two about broadcasting and about Channel Four, has said “the notion that a privatised Channel 4 would continue to invest significant sums in news and current affairs, or make equity investments in British feature films, or try out more programme ideas each year than any other channel, is utterly illusory.” Take the privately owned ITV, for example. It has spent years trying to lobby itself out of its public service commitments – with some degree of success. Hard-hitting, prime time documentaries like World in Action and First Tuesday are a thing of the past. It would be a shame to see Dispatches and Unreported World go the same way.

But ultimately, as a producer, my gravest concern would be the effect privatisation would have on the independent production sector and the wider creative economy. A privatised Channel 4 would almost certainly spend less money on programming. At the moment, state ownership ensures all – yes all - of the broadcaster’s profits are reinvested in content. Last year, that meant £600m, of which £430m went to the British independent production sector.

Look around the changes going on in global media. Vertical integration – networks buying up content creators, increasing in house production. David Abraham, Channel 4 CEO has suggested that, post-privatisation, spending on UK indies could immediately drop by £200m. This would have significant effects on-screen and catastrophic ones for us in the independent sector.

Even ITV has been moved to comment on the matter: “We would be concerned if any change to Channel 4’s ownership were to have a negative impact on the independent production sector, which is such an important part of the wider UK creative industries.”

Channel 4 has spent £8 billion with indies over its history, and its investment supports an estimated 19,000 employees. It isn’t scare-mongering to say that that investment in British content-creators would be significantly diminished, causing a lot of people to lose their livelihoods, not spending money, not paying taxes. More money sitting in shareholders’ bank accounts, gathering interest. For all Channel Four’s faults, do we really want that, for a short term (and, in macroeconomic terms, insignificant) cash injection into the treasury’s coffers?

David Elstein wrote that “Without shareholder pressure to hold down costs, Channel 4’s staff have attained salary levels that are the envy of the industry,” suggesting that David Abraham’s £800,000 pay package could elicit gasps of disbelief. Hold that thought and look at his rivals’ salaries. Adam Crozier at privately owned ITV pulled £4.4 million last year, and £8.4 million the year before that. And over at Sky, CEO Jeremy Darroch netted a not insubstantial £17 million last year. So much for shareholder pressure keeping executive salaries down. Discovery’s David Zaslav, according to the LA Times, made a cool $156m in 2014. So, if salaries are more likely, pace Elstein, to go up, shareholders’ dividends will have to come from elsewhere. It doesn’t take a wild leap of the imagination to accept that programming budgets might take a hit.

I think the government should be careful what it wishes for. While it tries to stop the BBC making popular programmes (anyone wondered if that’s a popular policy?), selling off Channel Four for about a billion makes no sense to me. Cashing in this unique cultural asset for a billion pounds when, according to the Red Book, public spending in 2015-16 is set for £750bn, means that the money will have gone in about one third of a working day. Think about that.













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