Lord Burns, the chair of Channel 4, is understood to be looking at options for a partial or full sell-off of the broadcaster as the government considers the sale of state assets to help reduce its budget deficit.
The former Treasury economist and chair of Santander bank is believed to be preparing various proposals that would allow Channel 4 to maintain its remit to provide distinctive public service programming in the event of a sale.
It is not clear whether Burns, the author of several landmark government reports on broadcasting and economic issues, was asked by the government to consider various options or the review is a pre-emptive measure that could be used to defend the commercially funded, state-owned broadcaster if it were to be sold.
The review comes as the Treasury considers the sale of public assets to raise £12bn in the runup to this year’s autumn spending review. The Treasury and the Department for Culture Media and Sport are understood to be receptive to ideas regarding Channel 4, though senior government sources stressed that there were no active plans being discussed with the broadcaster’s management and no bids tabled.
Draft proposals from Burns are understood to have been seen by John Whittingdale, the culture secretary, who refused to rule out the future privatisation of Channel 4 when speaking to an audience of TV executives in Edinburgh this week. “The ownership of Channel 4 is not currently under debate. Do I say there are no circumstances in which I would ever consider it? No, I don’t,” he said.
Whittingdale stressed the importance of maintaining Channel 4’s scope. “What I do say is the remit of Channel 4 is a priority and it’s not going to change ... I would have no intention of changing the remit of Channel 4 and I would want Channel 4 to serve that remit.”
Channel 4’s remit includes a commitment to provide distinctive, risk-taking programming, support the independent production sector and promote new talent. Any company looking to buy a stake in the broadcaster would have to agree to continue these less profitable commitments. Such commitments make valuations for Channel 4 difficult but some estimates have put the figure as high as £1bn.
One option which could be under consideration is a “golden share” sell-off, under which the government retains a nominal share with the power to outvote all others in order to maintain some control, in this case over the remit.
Rumours about the possible privatisation of Channel 4 have re-emerged since the Shareholder Executive, which manages the government’s ownership of the broadcaster as well as the Royal Mint, nuclear fuel company Urenco and other assets, was moved from the Department for Business, Innovation and Skills to the Treasury. The chancellor, George Osborne, is understood to be considering the value of all such assets, estimated to be worth a total of £32bn, in order to reduce debt obligations.
In July, there were several reports that the government was considering proposals to privatise Channel 4.
Burns and Channel 4 declined to comment In recent interviews, the Channel 4 chief executive, David Abraham, said that the special nature and value of the broadcaster would be eroded by privatisation.
Jay Hunt, chief content officer, also told the Guardian that her commissioning decisions would change if Channel 4 was part of the private sector.
