finance

Channel 4 chief downplays privatisation threat after healthy results


The chief executive of Channel 4 has downplayed the government’s renewed threat to sell the UK public service broadcaster, arguing that the network’s performance during the pandemic has “clearly proved our financial sustainability”.

Alex Mahon’s comments came after culture secretary Oliver Dowden this month said that privatisation plans for Channel 4 were back “on the table”, as the Conservative government takes a combative stance against the BBC and its smaller peers.

Channel 4, which is publicly owned but commercially funded, on Thursday said when announcing its full-year results that it expected revenues in 2020 to be between 7 per cent and 10 per cent below 2019 figures, which at £985m were its second highest on record.

The broadcaster, which recorded a £17m adjusted operating deficit in 2019, said it expected to end 2020 with a “significant” financial surplus and would pay back the furlough payments it had received from the government, which amounted to some £1.5m.

The strong results could help ease the pressure Channel 4 has found itself under after the government adopted a more hawkish approach to the country’s public service broadcasters, signalling little support as they struggle to compete with deep-pocketed streaming services.

“It is OK to ask questions about [Channel 4’s future] and for us to be ready to be debated,” Ms Mahon said on Thursday, adding: “We have clearly proved our financial sustainability and how important we are to audiences”.

The broadcaster was, much like its peers, badly hit by the pandemic, with advertising revenue plummeting 50 per cent during the lockdown, which also forced most of its film and television production sets to shut.

But people stuck at home seem to have binge-watched television, and Channel 4 said growth in viewing by younger people, a demographic increasingly hard to reach for traditional broadcasters, had been strong.

During the lockdown, views on the broadcaster’s on-demand platform All 4 grew over 50 per cent, an important metric as Channel 4 and its peers increasingly compete with online-only platforms such as Netflix and YouTube.

“We’ve come through the biggest crisis in the history of TV advertising and emerged . . . with very impressive digital growth,” said Charles Gurassa, Channel 4 chair. The broadcaster said it expected a fifth of revenues this year to come from its digital on-demand platforms.

Channel 4, which has a mandate to serve a younger and more diverse audience, has since its launch in 1982 faced several privatisation threats.

The most recent was in 2016, when the government ended up scrapping plans to sell the broadcaster but pledged to relocate its headquarters outside of London, something that Channel 4’s then chief executive, David Abraham, vehemently opposed.

Ms Mahon, who became chief executive in late 2017, has taken a more conciliatory approach to the forced move of its headquarters to Leeds. She said on Thursday that the broadcaster was “on track” to have 300 employees outside of London by 2023. Earlier this year, Ms Mahon had announced that top management would remain in London.



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