Investors circle around Channel 4 as privatisation draws interest
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Loading... - GEMMA BROWN
- 01 Nov 2020
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Media giants and private investors including Discovery Communications, BT and a consortium led by its former chairman Luke Johnson are circling Channel 4 as the Government prepares to sell off the broadcaster.
It is understood that Mr Johnson, who chaired the taxpayer-owned broadcaster between 2004 and 2010 and now leads the private equity firm Risk Capital Partners, has approached a string of potential backers over a bid, which City sources estimate could value Channel 4 at more than £1bn.
Meanwhile sources familiar with thinking at Discovery, the global television giant behind pay-TV programmes such as Deadliest Catch, said it was keeping a close eye on Government plans for Channel 4 and weighing a bid.
The company was in the running last year to take over Channel 5 but balked at the price demanded by its then-owner, the magazine publisher Richard Desmond.
Channel 4 and its larger, wealthier audience could be more attractive to Discovery. Ownership of free terrestrial channels has formed a key part of Discovery’s expansion strategy in European markets and it recently acquired pan-European rights to the Olympics, which come with obligations to show the games on free-to-air TV.
Discovery is also a joint owner of one of Channel 4’s biggest programme suppliers, the production company All3Media, which makes hits including Gogglebox, so could further benefit from sway over the broadcaster’s commissioning.
A sale to a US buyer such as Discovery could prove politically challenging, however, Whitehall sources admitted. David Abraham, Channel 4’s chief executive and a former senior Discovery executive, has voiced industry fears over American takeovers of British television assets.
Selling Channel 4 to BT would raise no concerns about foreign ownership. The telecoms giant is believed to be considering whether it should bid, a move that would represent a further major expansion as it continues to build its pay-TV business and prepares to integrate the mobile operator EE.
The pair already have strong commercial ties. Channel 4 sells advertising for BT Sport in a deal that was recently expanded with the launch of European club football coverage. As part of its deal with UEFA, BT was obliged to launch a free-to-air terrestrial channel, BT Sport Showcase, to show a selection of matches from each round of the Champions League.
Asked if BT would make a good owner for Channel 4, Gavin Patterson, BT’s chief executive, said: “I don’t think it is for sale is it?”
A BT spokesman added: “We don’t comment on rumour and speculation.”
The Government has confirmed that officials have been instructed to consider sale options for Channel 4. It is understood there have been preliminary discussions with bankers, but work is at an early stage and no key decisions are expected until January. Privatisation would require MPs’ approval.
Channel 4 management opposes a sell-off, arguing the broadcaster’s structure and non-profit status are unique assets to viewers and the creative sector that provide funding for risky ideas and new businesses. They have proposed an alternative company limited by guarantee structure that would maintain non-profit status.
