The Drum Awards Festival - Official Deadline

-d -h -min -sec

Bt Channel 4

BT tipped as likely to mount Channel 4 bid in event of privatisation go-ahead

Author

By John Glenday, Reporter

May 5, 2016 | 2 min read

BT has emerged as the most likely British contender to purchase Channel 4 amidst mounting speculation that the government may be gearing up for a potential privatisation of the broadcaster.

The provider has been named alongside Viacom and Discovery as the most likely bidders for the network but any sale may net the government far less than the £1bn windfall initially suggested, with a new report suggesting the actual sum could be as low as £500m depending on to what degree Channel 4’s public service model is protected.

Published by Channel 4 itself the 74 page tome suggests that privatisation would be ‘overwhelmingly negative’ for the economy, broadcasters and creative sector with reports of a £1bn sale likened to fantasy without commercialising the business.

The report states: “The most likely [UK communications company] candidate is, in our view, BT. Given its cash flow and balance sheet, BT could certainly afford to buy Channel 4, even after the EE acquisition. It is also already expanding in TV, although this development is still at a relatively early stage.”

In terms of pricing, the report cites a ‘realistic maximum price’ as things stand of between £400 to 500m, adding: “Any price above this approximate range can only come from [the buyer’s] ability to get more ‘bang for the buck’ – revenue per pound – from Channel 4’s content budget.

“This is the big issue for privatisation because of the tension between delivering the remit and maximising shareholder value and, therefore, the privatisation proceeds.”

The report also raises fears of a reduction in Channel 4’s spending on UK content post sale with an incoming purchaser likely to divert a greater chunk of the channels £600m production budget towards the acquisition of US programming.

Bt Channel 4

More from Bt

View all

Trending

Industry insights

View all
Add your own content +