The station’s offer to invest an additional 200 200m a year in UK broadcasts over the next decade through a privately-backed consortium was a “downside risk”, according to official advice to the government, while reforms could be carried out more quickly through privatization.
Channel 4 made the investment bid as part of an eleven-hour effort to stop Culture Secretary Nadine Dorries from landing the station on private.
Alex Mahon, his chief executive, also tried to appeal the government’s agenda by creating 600 new roles outside London and increasing the number of broadcasts outside the capital from 35 to 50.
However, the government’s body overseeing the ownership of Channel 4 said there were “significant enforcement risks” associated with the proposals.
Documents sent to UKGI ministers stated: “The [intellectual property joint venture] is a new structure and carries a significant risk of being classified in the public sector, as a result of which it enters [the government’s] balance sheet along with the debt he plans to raise. This may make it unacceptable to the government.
“There is a question as to whether the public sector / taxpayer is best placed to take on these risks when many of the targeted results could undoubtedly be delivered in private ownership, possibly at a higher rate and scale with reduced risk.
“Should [the] plans for publicly owned reforms fail to pay off, in whole or in part, [the Government] will continue to carry the downside risk “.
Ministry of Digital, Culture, Media and Sports officials are also working with JP Morgan on plans for the Channel 4 list in London if a viable offer fails, the Sunday Times reported.
Channel 4 is state-owned and operates on a non-profit model with programs funded through advertising sales.
The privatization process is expected to begin next year, with the sale likely to be completed in early 2024 at a cost of about 1 1 billion. However, the government is facing a significant political backlash from opposition parties and its own supporters. The House of Lords is expected to try to swamp the sale until the next election.
ITV is reportedly investigating a bid for the broadcaster, with speculation that Sky, Discovery and Channel 5 owner Paramount could also enter into a deal.
Enders Analysis, the independent media consulting firm, believes Channel 4 could sell for between 600 600 billion and 1,5 1.5 billion, depending on how much of its mission is protected as part of the deal.
Channel 4 declined to comment.
