Channel 4 chief hits out at privatization campaign Business

Official advice to ministers seen by The Telegraph snubbed the move on the grounds that a joint venture with an outside investor would carry ‘downside risk’ to public finances.

Responding to concerns raised by UK Government Investments (UKGI), the body which controls the public ownership of Channel 4, Ms Mahon said: ‘If Channel 4 created an entity which was to be majority controlled by Channel 4, it would sit on the balance sheet of national public sector debt.

“Our proposal was not to create an intellectual property fund majority controlled by Channel 4, and therefore not to be taken into account in the public sector’s public debt. This is a wording difference between what is proposed and what is described in this document.

Ministers pushed ahead with plans to privatize Channel 4, saying it would be best if it was in the hands of a deep-pocketed backer to ensure it could compete with the huge power of purchase of American streamers.

Nadine Dorries, the Culture Secretary, called criticism of privatization a ‘leftist luvvy lynch mob’ but also claimed she was not being discharged for ‘ideological reasons’ and that Ms Thatcher wanted to sell the broadcaster in 1988.

Announcing her white paper last week, Ms Dorries said Channel 4 would be privatized by the end of next year and its publisher-broadcaster model would give way to a new mandate that would allow it to create programs to better compete with streamers.

Ms Mahon said Netflix’s big spending may already be over, with the streaming service losing around 2 million subscribers this quarter.

“What are we going to do with these big [streamers] is starting to put more financial discipline into how they spend on programming and how they manage their schedules, much like broadcasters have had to,” she added.

“This era of unlimited, unmitigated, and controlled content spending will become more disciplined across the board.”

A Department of Culture spokesperson said: “The government, as the ultimate owner of Channel 4, has made the decision to sell.

“We are crystal clear that a change in ownership is necessary to give Channel 4 the best possible tools to innovate and grow rapidly without asking the taxpayer to effectively underwrite the business.

“Channel 4 itself accepts that changes are needed for it to thrive long into the future, but this previously leaked report is based on faulty assumptions and outdated analysis.”