Report : C4 sale would hit UK creative economy
UK public service broadcaster Channel 4 has published a new independent report it commissioned from advisory firm EY to assess the potential implications of privatisation . It shows the impact a change to Channel 4 ’ s ownership could have on both the UK ’ s economy and the broadcaster ’ s support for jobs across the whole of the UK in the next ten years .
The report finds that a scenario where Channel 4 is privatised with its unique publisherbroadcaster model removed could result in a £ 2 billion (€ 2.3bn ) ( 29 %) reduction in the broadcaster ’ s contribution through its supply chain to the economy by working with creative companies , including the UK independent production sector , over a ten-year period when compared to no change of ownership .
Significantly , the £ 2 billion contribution could be transferred from the creative economy and Nations and Regions , to a new private owner of Channel 4 .
The report also finds that the majority of the impact to jobs supported by Channel 4 would be felt in its supply chain , estimating that the number of jobs supported by Channel 4 in its supply chain across the UK on average each year ‘ could decline by 26 % if Channel 4 is privatised and the publisher-broadcaster model is removed , compared to Channel 4 ’ s current model ( 7,100 jobs supported each year compared to 9,500 jobs supported each year ).’
The new economic analysis shows that the UK ’ s regional economy could be disproportionately impacted by a privatised Channel 4 .
Of the reported £ 2 billion reduction from Channel 4 ’ s supply chain contribution to the creative economy , around £ 1 billion would be from the Nations and Regions – a c . 40 % decline on the regional supply chain contribution under Channel 4 ’ s current model .
“ Given Channel 4 ’ s current level of spend with external producers outside London , privatising Channel 4 and removing the publisher-broadcaster model could have a disproportionate impact on the wider creative economy in the Nations and Regions ,” advises EY . “ Our analysis suggests that the present value of GVA generated by Channel 4 in the Nations and Regions in its supply chain over a ten-year period could be 37 % lower if Channel 4 is privatised and the publisher-broadcaster model is removed , compared to Channel 4 ’ s current model (£ 1.8bn vs . £ 2.8bn ), due to a shift in commissioning spend towards in-house productions .”
The majority of the impact to jobs supported by Channel 4 would be felt in its supply chain
Furthermore , the number of jobs supported by Channel 4 through its supply chain in the Nations and Regions is also estimated to decline by around 35 % [ or 1,250 fewer jobs supported on average each year over the ten-year period ], compared to no change of ownership .
“ Our analysis illustrates the policy choices relating to Channel 4 ’ s remit and model and , in particular , the impact of policy choices on Channel 4 ’ s role as a stimulus to the wider creative economy , particularly in the Nations and Regions ,” says EY .
In addition , EY ’ s analysis suggests that the impact of removing Channel 4 ’ s publisherbroadcaster model could be felt most by small and medium sized production companies “ resulting in a reduction in revenues from primary commissions for these producers of up to 16 %”.
The report also suggests that privatisation could significantly impact Channel 4 ’ s wider social and cultural contribution made by appealing to young audiences with distinct content and supporting new emerging UK talent .
It shows that a new private owner could “ be incentivised to prioritise mainstream content that it expects to be commercially successful to reduce costs and maximise profits ”. As well as commissioning “ content that appeals to a more global audience to maximise the appeal of the content and revenues , potentially undermining the role that public service broadcasters play in representing the UK to the rest of the world .”
“ Operating as a not-for-profit organisation , Channel 4 can take risks on emerging talent , acting as a first ‘ big break ’ for new writers and talent ,” notes EY . “ Nurturing talent from an early stage carries a level of risk that the new owner of Channel 4 , faced with an incentive to generate returns for shareholders , may not have the appetite for .”
An EY report published earlier in 2021 showed that the broadcaster contributed nearly £ 1 billion to the UK economy and supported more than 10,000 jobs across the UK in a single year . It also found Channel 4 generated £ 274m of GVA in the UK Nations & Regions and supports nearly 3,000 jobs outside London .
Dorries new UK media minister
Nadine Dorries MP has been appointed Secretary of State at the UK ’ s s Department of Digital , Culture , Media and Sport following a wider than expected reshuffle by Prime Minister Boris Johnson of his Cabinet . She replaces Oliver Dowden , who has been named Minister without Portfolio within the Cabinet Office , effectively a demotion .
Dorries was previously outside the Cabinet as Minister of State for Mental Health , Suicide Prevention and Patient Safety .
Dorries ’ most notorious
involvement in broadcasting occurred
First contestant voted out of I ’ m a Celebrity , Get Me Out of Here
in December 2012 when she was suspended by the Conservative Party for abandoning Parliament for a fortnight to appear on reality TV show I ’ m a Celebrity … Get Me Out of Here , sitting as an Independent MP until May 2013 . She was the first contestant voted out of the show . Dowden was thought to have performed well during the pandemic and had been tipped for promotion or switch to a more prestigious portfolio . His demotion came on the day he made a keynote speech at the Royal Television Society Convention , setting out the benefits a potential change in ownership could bring to public service broadcaster Channel 4 .
Dorries will now take on responsibility of such a consultation , as well as the role of public service broadcasting in the UK , and the appointment off a new Chair for sector regulator Ofcom . Dorries is a long-term Boris Johnson supporter and hard Brexiteer .
EUROMEDIA 5