My article for the British Journalism Review Volume 32 Number 3
When the Downing Street Policy Unit wrote to tell Margaret Thatcher in April 1989 that “the Home Secretary rejects a privatised C4”, she scribbled back one word: “Why?” When she lost that battle with Douglas Hurd, her policy adviser wrote ‘As Channel 4 has successfully resisted privatisation, the government should not hand it over to the broadcasting fraternity for them to run as they wish’. She endorsed this vigorously with double strokes of her pen. When Channel 4 pushed back over a new board structure she wrote tersely “Parliament decides, not Channel 4.”
Her political secretary throughout this and other broadcasting battles in the 1980s was John Whittingdale, still in his 20s, who worked with her for several hours a day. By 1996, when John Major was Prime Minister, Whittingdale was an MP, asking the DCMS Secretary if he would consider the privatisation of Channel 4 “at the first opportunity”. By 2015 Whittingdale was the DCMS Secretary himself. He tried to make privatisation happen. Now, in 2021, it seems difficult to avoid the conclusion that John Whittingdale, minister of state for media and data’ is on Thatcher’s and his own unfinished business.
The Government’s document for an “open consultation” states a preference for a “change of ownership of Channel 4”. The ideological core is summed up by Whittingdale: “It’s worth asking the question why we need two publicly-owned broadcasters”. In effect he is saying that we can stomach one public intervention in the broadcasting industry (a BBC restrained as much as possible by its funding and its Charter) but not two.
Over the past three decades I’ve watched this debate mostly from the upper circle but occasionally from the front row of the stalls.The masterclass years were Michael Grade’s performances on the party conference fringe when, at over-cooked English breakfasts at fading seaside hotels, the Chief Executive of Channel 4 would imply but never actually express political sympathy for each different political party. This became a must see ticket for those invited.
The anti-privatisation cause was helped by influential figures such as Grade’s Chairman in 1996, the Tory donor Michael Bishop, who sent a “Dear John” letter to John Major which is credited with seeing off that year’s push for privatisation. A decade later Bishop, by then Lord Glendonbrook, was saying “Britain doesn’t need two publicly- owned broadcasters” and Michael Grade, by then Lord Grade, was arguing for privatisation.
Each time the policy debate is re-opened a new rationale is required. The rapid changes in technology have provided regular pegs. Today it is the growth of the “streamers” such as Netflix, although Channel 4’s most recent accounts show that the current model is robust enough to cope with not only multiple digital revolutions but also a global pandemic. Channel 4 is clearly sustainable. Indeed the current chairman Charles Gurassa says the broadcaster is in “demonstrably robust financial health”, with a “strong, debt-free balance sheet and access to the capital we need for investment”.
What is different this time is that in order to achieve their ideological goal by finding a buyer ,the Government may be prepared to sacrifice something very special about C4 that Margaret Thatcher created. Forty years ago, she saw the creation of a publicly owned publisher-broadcaster, funded by advertising but not allowed to make its own programmes, as a way of attacking what she called “the last bastion of restrictive practices”: the ITV companies and the technicians’ union ACTT.
In her own terms the launch of C4 was a great success not only as an attack on the ITV companies who eventually lost their advertising monopolies, and the ACTT which lost its closed shops but more positively because it created a whole new industrial sector of “independent production” (the “indies”) which had barely existed in television until then.
The UK became a global leader in the production and format market and all these industrial policies were achieved without a penny of public money and while providing the UK audience with some great television. The subsequent new terms of trade that independent producers could keep more rights to the programmes they made strengthened their negotiating arm and the wealth of some owners. The yacht steered by one leading indie arouses great envy amongst broadcasters who commission programmes from him.
After nearly 40 years of helping small companies grew and create wealth -how Thatcherite can you get?- the latest data show it still works with many more production companies than any other commercial broadcaster . C4 had 274 across film, tv and digital in 2020 compared to ITV’s equivalent of 86 and C5’s of 111 in 2019. As for any off-setting benefit from the arrival of the streamers, Ofcom figures show that in 2018 they produced 182 hours of original UK content compared to a total of 32,000 hours from Channel 4 and the other UK public service broadcasters.
Yet one of the six questions in DCMS’s consultation document is “Should the government remove the publisher-broadcaster restriction to increase Channel 4’s ability to diversify its commercial revenue streams?” The government’s reasoning is quite simple: some of those companies who might consider buying C4 – even those who do some business with independent producers – also have their own in-house production companies. Owning Channel 4 would offer new synergies and opportunities for these insiders which they are bound to want to exploit to recover the cost of purchase. Keeping the publisher-broadcaster model intact would inevitably limit the number of bidders and the size of their bids.
Chris Curtis of Broadcast magazine points out that if you allow a new C4 player “to own IP, launch in-house production or expand internationally, you can only do so at the expense of the indie sector. Attempting to stabilise a British broadcaster by undermining British production seems like an odd step”. When Broadcast launched a ‘Not 4 Sale’ campaign,100 bosses of indies signed up. John McVay,CEO of their trade body PACT, said: “I think it’s shameful that the public interest doesn’t appear at all in this consultation document”. The former Conservative leader in Scotland, Ruth Davidson, said selling off C4 was “preposterous” and changing its remit risked putting indies out of business. The media analysts, Enders, concluded that if Channel 4’s current remit was preserved it posed “little attraction to a buyer for more than a modest amount’ and ‘for a profit-oriented buyer, there would be motive and opportunity to game the current remit”.
Suddenly the Government’s rationale for change was becoming a recruiting sergeant for scepticism and opposition. Among the possible “new freedoms” which the document could be a relaxation of the requirements for news. In an interview with C4 News’ Krishnan Guru-Murthy, John Whittingdale said; “I like C4 – it has served the purpose it was created to do brilliantly”. But when Guru-Murthy asked him whether C4’s obligation to provide an hour of news in prime time a day could change if privatisation went ahead, Whittingdale said: “I have no preconception that would change.” Less than a reassuring answer. The Channel 4 licence that sets out that the news obligation could be changed in the same way that Channel 5 is currently asking to change its news schedule. If it came to budget cuts remember no broadcasting regulator has ever intervened to protect a news budget.
On top of all this potential room for post-privatisation flexibility the government has deliberately created a situation where nearly half of the non-executive directorships on the Channel 4 board, including the Chairmanship, will be vacant by the end of the year. Since those directors will appointed by Ofcom “in agreement with the Secretary of State for Digital, Culture, Media and Sport” the chance will be there for the government to begin to install a board for whom privatisation is a given. The job of these new directors would not be overseeing the running of a publicly-owned broadcaster or to resist privatisation, it would be to make the transition to a new private owner as smooth as possible.
Looking back to the 1980s, Margaret Thatcher went off the original idea of Channel 4 because after a few years she thought she had a better idea- the absorption of C4 into a merged private company with the owners of Channel 5. We shouldn’t be surprised, therefore, that this is one of the possible outcomes of the current DCMS process. The consultation document points out that “Channel 5 has thrived following its sale to ViacomCBS” and some see the American company as the most likely bidder. Tory MP Andrew Griffith, an adviser to Whittingdale, appears to want C4 to merge with ITV,C5 or Sky and a “glide path” away from the current terms of trade.
If that happens Margaret Thatcher’s ambition may finally be realised by John Whittingdale but her most valued TV legacy, this “creative greenhouse” as C4 once called it, the “R&D” lab of UK television, will disappear.
I have been connected with C4 for much of its history as Editor of Channel Four News, ITN Chief Executive, C4 consultant and a non-executive director of C4 for the seven and half years ending in May 2021.