Channel 4 CEO Alex Mahon has issued her most combative response yet to the government’s decision to privatize the broadcaster, calling the move “disappointing and a shame” and implying it will have damaging consequences for the UK TV industry.
Mahon has so far been walking a tricky tightrope between co-operating with the UK government and making the case for Channel 4 to remain public but she used a journalist briefing this morning to speak candidly about the negative impacts, repeatedly pointing out that the overwhelming majority (96%) of respondents to the government’s public privatization consultation are against a sale.
“We have discussed this in detail with the government and I think [privatization] is disappointing and a shame,” she said. “I’ve laid out numerically why I think the move will have a negative impact but of course this is the government’s choice and now we go ahead.”
Unveiling Channel 4’s alternative proposal to privatization, which was presented to the government in February, Mahon also provided figures that the government’s proposed move to allow Channel 4 to produce shows in-house after being sold will lose the UK production sector £320M ($402M) per year.
Around £82M ($103M) would be lost outside of London if the network is sold along with thousands of jobs, she added, while the government’s move would also take away Channel 4’s commitment to cinema via Film 4, which has been “important for the UK’s soft power credentials.”
The government’s proposals were presented in a landmark Broadcasting White Paper last week, which Mahon said contained some good such as updated prominence legislation and a reform of the broadcaster quota system.
“On Top Of Her Brief”
In a humiliating parliamentary committee appearance last year, UK Culture Secretary Nadine Dorries demonstrated a crucial misunderstanding of Channel 4’s model by believing it is funded by the taxpayer when it in fact makes money privately mainly through advertizing.
Questioned on whether she believed Dorries understood Channel 4’s model, Mahon paused for several seconds before saying Dorries is “well on top of her brief and clear about what she wants to achieve in the broadcasting landscape.”
“I don’t think [Dorries’ department] the DCMS wants to damage the creative industries but their White Paper is completely different from our proposal and we need to be careful not to create negative consequences for our industry,” she said. “The consequences can be foreseen and we have a responsibility to point them out.
“I guess the question is ‘What is the government trying to solve with privatizing Channel 4?’. I’m not entirely sure what the answer is.”
Much of the government’s language around Channel 4’s sale has centered on the network failing in the long-term without private backing as it faces tougher competition from global streamers but Mahon said this idea is part of a “hypothecated future” and pointed to the streamers having struggles of their own.
“There is a hypothecated future in which we are struggling in four years but that is hypothecated and what is factually true today is that we are doing very well,” she added, pointing to revenues exceeding £1BN ($1.3BN) for the first time in Channel 4’s history.
“Netflix subs are shrinking for the first time and what I think we will see with SVoDs is more financial discipline among their schedules in a way that broadcasters have done for some time. The era of unlimited, unmitigated, uncontrolled content spend could soon be over.”
The streamers view Channel 4 as a “wonderful and cost-free R&D department,” added Mahon, as the network road-tests initiatives such as a full day of Black programing or shows about the menopause that are loss-making but “inextricably bound up in our not-for-profit model.”
Questioned on whether she thinks privatization, which will take around two years, will ultimately go ahead, Mahon said she is “always optimistic and thinks there will be a lot of discussion.”