Michael Grade has thrown his support behind privatising Channel 4 to grow into a powerful media company, dismissing the current management’s opposition as “flying in the face of commercial logic”.
Lord Grade, who ran Channel 4 from 1987 to 1997, said that a sell-off, or partial sell-off, of the state-owned, commercially-funded broadcaster made sense.
“You have to look to see what you would lose and what you would gain [from a sell-off],” he said, speaking at a Broadcasting Press Guild lunch at Pinewood studios, where he holds the role of chairman. “What you would gain from privatisation is you could build a really big media business around Channel 4. I think the channel needs to be freed up [from state-ownership] really to move ahead.”
David Abraham, the chief executive of Channel 4, has said that a sell-off is likely to see the broadcaster fall into foreign ownership, or the hands of an “asset-stripping” domestic buyer.
He said such a change in ownership will put at risk key public service content such as the broadcaster’s news and current affairs output, and make it “just another Channel 5”.
Grade, who was vehemently against privatisation when he ran the broadcaster, said he had spoken to Abraham and didn’t believe these arguments were relevant in a hugely competitive modern market.
Channel 4 was launched in 1982 to provide competition to the BBC and ITV, the only channels then broadcasting in the UK. It would be eight years until Sky ushered in the start of the multi-channel era, and 15 years until Channel 5 hit the airwaves.
“These are the same old arguments from the 1980s, but I think the world has changed,” he said. “I think that flies in the face of commercial logic to be honest,” he said. “I don’t think that is a good enough answer. I certainly was against [privatisation] in the days of [Margaret] Thatcher and [John] Major … As of today, I’ve not heard an argument that convinces me that the same arguments that caused me to oppose privatisation [in the 1980s are valid today].”
Grade, who has also run the BBC and ITV during his lengthy career in the media industry, said that if it were to pursue a sell-off, the government could write protections clauses into any ownership contract.
“The government would have to decide what kind of [ownership] outcomes they didn’t want,” he said. “What you have to do if you were going to take over Channel 4, you would have to preserve the brand and work out what the brand was about. My supposition would be that Channel 4 News is a big piece of what makes Channel 4 different. These things are controlled by licences, you are licensed to broadcast and we have a very strict regulator.”
David Abraham, Channel 4 chief executive, said: “I have huge respect for Michael but he ran Channel 4 20 years ago, in an analogue era.
“Channel 4 is now a large multi-media digital business delivering record revenue and investment in British programmes as well as widespread public service delivery via a range of innovative commercial and creative partnerships – all at no cost to the taxpayer. I’m proud of the important contribution Channel 4 makes to the creative economy and invite Michael to debate this directly with me on a public platform.”
