Almost since Channel 4 launched 38 years ago, with the first episode of Countdown, there has been speculation that it is facing privatisation.
In January 1983, just two months after the channel launched, Kevin Goldstein-Jackson – the executive who helped launch hits like Tales of the Unexpected and who later headed the ITV franchise operator Television South West – was calling for it to be privatised.
As Margaret Thatcher’s privatisation revolution rolled on through the 1980s, the calls kept coming, often from surprising directions.
In 1987, Michael Grade, who was then managing director of BBC television and who later went on to be dubbed Britain’s ‘pornographer in chief’ when he became Channel 4’s chief executive, said “it would be a very good thing indeed for British broadcasting if that were to happen”.
Somehow, though, Channel 4 managed to remain state-owned. The last serious calls for the broadcaster to be privatised came after David Cameron’s 2015 general election victory, when John Whittingdale, the then Culture Secretary and Matt Hancock, the then Cabinet Office Minister, were said to be pushing for it.
Advertisement
A key aspect to their proposal was that it would raise up to £1bn for the government.
Now, however, privatisation talk is again in the air.
More from Business
The Financial Times reported on Friday that Channel 4 will be “steered towards privatisation” by the UK government as soon as next year. It said ministers were set to launch a formal consultation within weeks on the future of the broadcaster.
This could, according to the FT, even see an outright sale of Channel 4.
Ominously for Channel 4, which has always opposed being privatised, the FT said the consultation would be run by Mr Whittingdale himself.
There are a number of reasons why the idea has resurfaced now. The first is that, in the eyes of some in government, Channel 4’s business model is under pressure. As a free-to-air broadcaster that has few programme rights to exploit, it is unusually exposed to the vagaries of the advertising market, as has been shown during the last year.
The broadcaster reported a pre-tax loss of £26m in 2019 – Channel 4 itself has put this down to the cost of opening its new site in Leeds – but then suffered a collapse in advertising revenues when the COVID-19 pandemic erupted in March last year.
For its part, Channel 4 itself has said that it expects to report a surplus for the year, with advertising having bounced back strongly in the second half of the year.
The broadcaster also shored up its finances with aggressive cuts to its budget during the pandemic and by taking out loans. One indication of its recovery to financial health was that it repaid furlough money to the Treasury as long ago as last autumn.
It is also argued that the rise of streaming platforms like Amazon Prime, Disney+ and Netflix and the continued strength of multi-channel television broadcasters like Sky, the owner of Sky News, makes Channel 4 vulnerable to a loss of viewers that would eventually hit its advertising revenues.
Channel 4 has responded by arguing that, in 2020, it actually raised its share of television viewing, not only in terms of linear television, but also via digital platforms. It said at the end of last year that digital viewing now accounted for one in every eight hours of Channel 4 viewing.
Despite all this ministers fear that, as a business, Channel 4 is unusually vulnerable.
Earlier this year, Oliver Dowden, the Culture Secretary, vetoed the reappointment of two of Channel 4’s directors, Uzma Hasan and Fru Hazlitt, even though both Channel 4 itself and Ofcom, the broadcasting regulator, were supportive.
It was reported at the time that Mr Dowden wanted the two women, both of whom come from a production background, replaced with new directors boasting more financial experience.
Another reason why privatisation may be back on the agenda is the public finances.
Some in Whitehall believe that a significant sum of money could still be made from a sale of Channel 4 – although most analysts who have run the numbers believe any sale proceeds would fall well short of the £1bn mooted six years ago.
It is also argued that a new owner for Channel 4, with deep pockets, might help ensure the quality of its output. The problem is that there are few obvious buyers out there for the channel.
Most of the big US buyers who might be interested are focused on other things while Channel 4’s relative lack of intellectual property rights – a big contrast with, for example, ITV – means there would be few gains to be made by a big media buyer.
Viacom-CBS, the owner of Channel 5, is seen as the likeliest buyer but it, too, is more focused currently on building its streaming service, Paramount+, as well as trying to shore up confidence among its investors after a calamitous drop in its share price earlier this year related to the collapse of the hedge fund Archegos Capital.
Investors also suspect Viacom-CBS will be looking to conserve capital to invest more in content as it battles it out with rivals like Netflix and Disney, whose Disney+ streaming service has strongly outperformed Wall Street’s expectations, rather than use it buying an asset like Channel 4.
Moreover, if any of the big US broadcasters were interested in acquiring a UK free-to-air broadcaster, they are far more likely to alight on ITV which, unlike Channel 4, has its own production arm in ITV Studios and far more intellectual property assets to exploit.
That might make a flotation on the stock market, which would provide Channel 4 with more access to capital, as a likelier outcome – although it has been speculated in some quarters that ITV itself might be a buyer.
Expect Channel 4 to strongly resist any attempt to privatise it.
In the past the broadcaster has been able to muster a substantial lobbying campaign, relying on members of the arts establishment, to argue that its remit to produce distinctive programming would be jeopardised by a change of ownership.
It is also likely to point to the fact that it is a major investor in British content and spends heavily with independent production companies.
That, however, is a harder argument to make when the likes of Sky and Netflix are investing record sums in British programming, when the BBC’s drama output is still scoring hits and when ITV’s production arm is in such fine fettle.
In short, a lot of the arguments Channel 4 has used to resist privatisation in the past may not be as pertinent as was once the case.
This may represent Mr Whittingdale’s best opportunity yet to push for a policy he has sought for 25 years.
Potential suitors have again begun circling ITV, Britain’s biggest terrestrial commercial broadcaster, after a prolonged period of share price weakness and renewed questions about its long-term strategic destiny.
Sky News has learnt that a number of possible bidders for parts or all of the company, whose biggest shows include Love Island, have in recent weeks held early-stage discussions about teaming up to pursue a potential transaction.
TV industry sources said this weekend that CVC Capital Partners and a major European broadcaster – thought to be France’s Groupe TF1 – were among those which had been starting to study the merits of a potential offer.
The sources added that RedBird Capital-owned All3Media and Mediawan, which is backed by the private equity giant KKR, were also on the list of potential suitors for the ITV Studios production arm.
One cautioned this weekend that none of the work on potential bids was at a sufficiently advanced stage to require disclosure under the UK’s stock market disclosure rules, and suggested that ITV’s board – chaired by Andrew Cosslett – had not received any recent unsolicited approaches.
That meant that the prospects of any formal approach materialising was highly uncertain.
The person added, however, that Dame Carolyn McCall, ITV’s long-serving chief executive, had been discussing with the company’s financial advisers the merits of a demerger or other form of separation of its two main business units.
More from Money
Its main banking advisers are Goldman Sachs, Morgan Stanley and Robey Warshaw.
ITV’s shares are languishing at just 65.5p, giving the whole company a market capitalisation of £2.51bn.
Advertisement
The stock rose more than 5% on Friday amid vague market chatter about a possible takeover bid.
Bankers and analysts believe that ITV Studios, which made Disney+’s hit show, Rivals, would be worth more than the entire company’s market capitalisation in a break-up of ITV.
People close to the situation said that under one possible plan being studied, CVC could be interested in acquiring ITV Studios, with a European broadcast partner taking over its broadcasting arm, including the ITVX streaming platform.
“At the right price, it would make sense if CVC wanted the undervalued production business, with TF1 wanting an English language streaming service in ITVX, along with the cashflows of the declining channels,” one broadcasting industry veteran said this weekend.
“They would only get the assets, though, in a deal worth double the current share price.”
Takeover speculation about ITV, which competes with Sky News’ parent company, has been a recurring theme since the company was created from the merger of Carlton and Granada more than 20 years ago.
ITV said this month that it would seek additional cost savings of £20m this year as it continued to deal with the fallout from last year’s strikes by Hollywood writers and actors.
It added that revenues at the Studios arm would decline over the current financial year, with advertising revenues sharply lower in the fourth quarter than in the same period a year earlier because of the tough comparison with 2023’s Rugby World Cup.
Allies of Dame Carolyn, who has run ITV since 2018, argue that she has transformed ITV, diversifying further into production and overhauling its digital capabilities.
The majority of ITV’s revenue now comes from profitable and growing areas, including ITVX and the Studios arm, they said.
By 2026, those areas are expected to account for more than two-thirds of the group’s sales.
This year, its production arm was responsible for the most-viewed drama of the year on any channel or platform, Mr Bates versus The Post Office.
In its third-quarter update earlier this month, Dame Carolyn said the company’s “good strategic progress has continued in the first nine months of 2024 driven by strong execution and industry-leading creativity”.
“ITV Studios is performing well despite the expected impact of both the writer’s strike and a softer market from free-to-air broadcasters.”
She said the unit would achieve record profits this year.
ITV and CVC declined to comment, while TF1, RedBird and Mediawan did not respond to requests for comment.
The family which has owned Ann Summers, the lingerie and sex toy retailer, for more than half a century is to explore options for the business which could include a partial or majority sale.
Sky News has learnt that the Gold family is close to hiring Interpath, the corporate advisory firm, to work on a strategic review which could lead to the disposal of a big stake in the chain.
Retail industry sources said this weekend that Ann Summers had been in talks with Interpath for several weeks, although it has yet to be formally instructed.
The chain, which was founded in 1971 and acquired by David and Ralph Gold when it fell into liquidation the following year, trades from 83 stores and employs over 1,000 people.
The family continues to own 100% of the equity in the company.
Sources said that some dilution of the Golds’ interest was probable, although it was far from certain that they would sell a controlling stake.
In a statement issued in response to an enquiry from Sky News, Vanessa Gold, Ann Summers’ chair, commented: “We, like many other retailers, are dealing with the unhelpful backdrop to business of the decisions announced by the government at the Budget and the rising cost to retail.
More from Money
“As a family-owned business, we are in a fortunate position and have committed investment for over 50 years.
“This has created a robust and resilient business.
Advertisement
“We are exploring a number of options to further grow the brand into 2025 and beyond.”
Ms Gold is among many senior retail figures to publicly criticise the tax changes announced in the Budget unveiled by Rachel Reeves, the chancellor, last month.
The British Retail Consortium published a letter last weeks signed by scores of its members in which they warned of price rises and job losses.
Private equity firms and other retail groups are expected to express an interest in a takeover of Ann Summers.
One possible contender could be the Frasers billionaire Mike Ashley, who already owns upmarket rival Agent Provocateur.
Any formal process is unlikely to yield a result until next year, with the key Christmas trading period the principal focus for the shareholders and management during the next month.
Ann Summers is one of Britain’s best-known retailers, with a profile belying its relatively modest size.
In the early 1980s, Jacqueline Gold, the then executive chairman who died last year, conceived the idea of holding Ann Summers parties – a key milestone in the company’s growth.
At its largest, the chain traded from nearly twice the number of shops it has today, but like many retailers was forced to seek rent cuts from landlords after weak trading during the COVID-19 pandemic.
This week, The Daily Telegraph reported that the Gold family had stepped in to provide several million pounds of additional funding to Ann Summers in the form of a loan.
Vanessa Gold – Jacqueline’s sister – also asked bankers to explore the sale of part of the family’s stake in West Ham United Football Club last year.
That process, run by Rothschild, has yet to result in a deal.
Bosch will cut up to 5,500 jobs as it struggles with slow electric vehicle sales and competition from Chinese imports.
It is the latest blow to the European car industry after Volkswagen and Ford announced thousands of job cuts in the last month.
Cheaper Chinese-made electric cars have made it trickier for European manufacturers to remain competitive while demand has weakened for the driver assistance and automated driving solutions made by Bosch.
The company said a slower-than-expected transition to electric, software-controlled vehicles was partly behind the cuts, which are being made in the car parts division.
Demand for new cars has fallen overall in Germany as the economy has slowed, with recession only narrowly avoided in recent years.
The final number of job cuts has yet to be agreed with employee representatives. Bosch said they would be carried out in a “socially responsible” way.
About half the job reductions would be at locations in Germany.
Bosch, the world’s biggest car parts supplier, has already committed to not making layoffs in Germany until 2027 for many employees, and until 2029 for a subsection of its workforce. It said this pact would remain in place.
Advertisement
The job cuts would be made over approximately the next eight years.
The Gerlingen site near Stuttgart will lose some 3,500 jobs by the end of 2027, reducing the workforce developing car software, advanced driver assistance and automated driving technology.
Other losses will be at the Hildesheim site near Hanover, where 750 jobs will go by end the of 2032, and the plant in Schwaebisch Gmund, which will lose about 1,300 roles between 2027 and 2030.
Its remaining German plants are also set to be downsized.
While Germany has been hit hard by cuts, it is not bearing the brunt alone.
Earlier this week, Ford announced plans to cut 4,000 jobs across Europe – including 800 in the UK – as the industry fretted over weak electric vehicle (EV) sales that could see firms fined more for missing government targets.