Channel 4 hits include the Great British Bake-Off
(Picture: Channel 4/Love Productions)ITV is in “pole position” to buy Channel 4, the City says, after the government fired the starting gun on the sale of the broadcaster.
Roddy Davidson at Shore Capital said Channel 4 would be “of interest to a range of buyers, including overseas players” but ITV was “in pole position in terms of commercial logic.”
The Love Island broadcaster, which has laid out ambitious plans to take on US streaming giants, has long been touted as a potential acquirer if Channel 4 was sold off.
Bernstein said in November that ITV’s “strong finish to the year provides the balance sheet headroom for a deal” but flagged possible competition concerns.
Sarah Simon at Berenberg said: “Clearly a question whether that would be allowed from an anti-trust/share of voice perspective. “
The FTSE 100 broadcaster may also struggle to match the financial firepower of US rivals if Channel 4 attracts overseas interest. Amazon, Netflix and Channel 5 owner Viacom are mentioned as other potential bidders, though they may be put off by the public broadcasting requirements.
ITV was approached for comment.
Announcing the decision to sell-off Channel 4, Culture Secretary Nadine Dorries said on Twitter: “Government ownership is holding Channel 4 back from competing against streaming giants like Netflix and Amazon.
“A change of ownership will give Channel 4 the tools and freedom to flourish and thrive as a public service broadcaster long into the future.”
The decision has already proved highly controversial, angering the public and MPs on both sides of the House of Commons. Tory MP Julian Knight, who heads the Media and Sport Select Committee, suggested the privatization could be being done for the “wrong reasons” as “revenge” for the channel’s coverage of Brexit.
Channel 4 itself has said it is “disappointed” with the government’s decision.
Ben Barringer, a research analyst at Quilter Cheviot, said: “It is wishful thinking to assume Channel 4 being taken private will allow it to compete with the likes Netflix, Amazon and Disney.
“Essentially small national broadcasters are subscale, just like the regional broadcasters, such as Anglia and Thames Television, that preceded it in the previous century.
“TV is now a global game and content is the key ingredient for success. As such, the content production part of Channel 4 is valuable to a big name, but only at the right price. Those big streaming giants can simply go to the production companies to make the content, rather than buying Channel 4.”
