The Future of Channel 4.

The Future of Channel 4.

Call me simple, but I just don’t get it.
Channel 4 in the UK is predicted to be insolvent/bankrupt or otherwise financial unable to continue within the next few years.
There has been some talk of merging it with one of the other UK broadcasters – the benefit would be synergies could be realised that reduced the cost.
Ch4 is owned by the government but is funded solely through advertising. It has a Public Service obligation that has meant it has not adopted the “me too” (Strictly Come Dancing –BBC begat Dancing On Ice) strategy of ITV or stick with tried and trusted popular formats (I’m a celebrity…) also a strategy of ITV.
Ch4 has a very credible record in producing innovative, challenging programming over its life. Not having to provide a return to shareholders should mean that more of its revenues can go into continuing this innovation. Merging with a commercial broadcaster ITV or Ch5 may give operational cost synergies but it will also add the cost of servicing shareholders.
When the Chairman of Ch4 says he favours privatisation over merger that doesn’t seem to make sense either – there are not operational cost synergies but the burden of servicing shareholders would arrive. This will inevitably be followed by the finance people that understand nothing about creativity (as demonstrated in ITV (Charles Alan) and simply drive cost out and stick to tried and trusted formats that eventually become stayed and boring.
Privatising Ch4 could mean that Luke Johnson (the Chairman) gets some kudos and a pay rise, for chairing a private company. This is the only driver I can see for suggesting it. I can’t see that if Ch4 is destined to become financially insolvent, as it is,why (unless there are costs that they already know can be cut) its future would be any more secure if privatised
While there might be some other genuine reason I am sceptical. Following the £600k p.a. pension payments to the failed head of RBS I am fed up with individuals benefiting from stripping the country’s assets and cultural heritage or screwing the tax payer.
Here is a thought…maybe not good for Ch4, but BT is struggling with BT Vision and could derive some synergies from acquiring Ch4. It would also be less challenging to maintaining the plurality of UK broadcasters.