C4’s Mahon attacks sell-off plans
April 11, 2022
By Colin Mann
Alex Mahon, chief executive of Channel 4, has mounted a strong defence of the broadcaster following the UK government’s announcement that it plans to privatise the channel, describing it as “a thriving national asset with a business model that has never been in better health”.
Writing for The Sunday Times online, Mahon says the reaction to the news has been an outpouring of affection for the service. “And that is from people from all walks of life — from MPs and peers of all parties, to mayors and local politicians, to the hundreds of thousands of ordinary people who signed different online petitions. Even national treasure Sir David Attenborough waded in,” she notes.
“Although the government is yet to publish the results of the 60,000 responses to its consultation on the proposed privatisation, the signs are that they were overwhelmingly in favour of keeping Channel 4 in public ownership,” she suggests.
“We celebrate our 40th anniversary in November and I am glad to say we are the perfect example of ‘life begins at 40’. Channel 4 is a thriving national asset with a business model that has never been in better health,” she asserts. “Throughout our four decades, we have not taken a penny in support from the taxpayer and, in fact, analysts estimate that we have returned about £12 billion (€14.4bn) to UK GDP in that time. In the past two years, our revenues have reached record levels and, unlike other broadcasters, we have no debt — and we have £270 million in cash in the bank. Even more important, we are as creatively healthy as we have ever been, with our shows picking up no fewer than 44 Bafta nominations last week,” she reports.
“Unlike any other broadcaster, all our shows are made by entrepreneurial, privately-owned businesses, and we have become a highly efficient engine for converting advertisers’ investment into revenues for hundreds of TV production companies — some big, but most pretty small,” she says.
“Put simply, Channel 4 is a beautifully-designed economic miracle. And therefore, you might wonder why another Conservative government would want to swap out public ownership for private shareholders,” she adds.
“Well, the question has been asked whether we can survive and thrive in the future under the ‘straitjacket’ of being owned by the public. And whether Channel 4 will be crushed by the likes of Netflix and Amazon, which increasingly dominate video-viewing markets. And without access to private money and reliant on advertising revenue — not subscription — will we gradually be crowded out of our own market,” she asks.
“Like the rest of the UK television sector, we openly recognise all these challenges. However, we are not intimidated by them, thanks to the fundamental strength of our business and the changes we have made in recent years. We have expertise, and that gives us confidence in the forward plan,” she declares.
“We already lead UK television in making the transition from traditional to online advertising revenues, and we know that many British consumers want content for free and are ready for the digital future. The plan we proposed to government as an alternative to privatisation accelerates our existing digital strategy as well as multiplying the secondary benefits of public ownership, such as job creation and skills building outside London — in places where private media companies generally don’t invest,” she notes.
“Others have pointed out that we are very different to Amazon and Netflix: they are not trying to compete with the shows we make in Hull or Derry or Leeds, nor are they sending journalists out to Ukraine,” she contends.
“In essence, we suggested we use more of our money to do more for Britain. Our plan to keep Channel 4 in public hands would deliver 100,000 training places for young people outside London who would otherwise never get the chance to taste life in the media. That would be starting immediately, continuing for the next decade and delivering £2 billion of value,” she suggests.
“The plan also substantially increases the proportion of the money we spend with production companies outside the M25 — from the statutory 35 per cent to a commitment of 50 per cent. This is a percentage that we achieved last year for the first time, and we believe we can continue to hit it year after year,” she claims.
“And to address the question of resilience, we suggested a new scheme in which we would use private capital in a joint venture set-up that would build into a £200 million-a-year creative business over time,” she reveals.
“All in all, a publicly-owned Channel 4 would put billions more into every corner of the UK and foster the creation of thousands more jobs. And that money would allow us to commission more programmes and continue our virtuous circle,” she advises.
“We appreciate the questions that government has asked of us, as it has been a creative challenge to spark new thinking. And I believe we should now be getting on with these plans, hitting those targets, and helping young people who think of television as being beyond their reach to take the first steps in careers behind and in front of the camera,” she states.
“But what is clear is that most people don’t want us to be in the news; they just want Channel 4 to do more of what it is supposed to do: serve the British people’s wider interests at the same time as we make them laugh, cry and share in the joy of great television moments — like the final series of Derry Girls launching this week,” she notes.
“And that remains our North Star as our future is now determined through parliament,” she concludes.
Mahon’s comments come as reports suggest that officials at the Department for Digital, Culture, Media and Sport are working with JP Morgan on plans for a stock market float in London in case a credible bid does not emerge.