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Channel 4 to hit spending target two years ahead of schedule, MPs told

·4 min read

Broadcaster Channel 4 says it will meet a target to spend 50% of its commissioning budget outside of London two years early – as bosses warned that privatisation could see money cut from programming.

Alex Mahon, Channel 4’s chief executive, said it could have made “different decisions” on where the cash was spent, particularly given the coronavirus pandemic.

But she added she was “delighted” the target would be achieved in 2021, well ahead of the 2023 target date.

With the UK Government having recently carried out a consultation into the possible privatisation of the channel, Ms Mahon warned of the impact this could have on spending on programmes.

Channel 4 broadcast Emma Raducanu’s victory in the US Open – but chief executive Alex Mahon said it did not make a profit from events such as that (ZUMA/PA)
Channel 4 broadcast Emma Raducanu’s victory in the US Open – but chief executive Alex Mahon said it did not make a profit from events such as that (ZUMA/PA)

She said the broadcaster spent some £600 million to £700 million a year on commissioning programmes.

And speaking as she gave evidence to MPs on Westminster’s Scottish Affairs Committee, she said: “We’ve committed to have 50% qualifying spend across the UK, not from London. In fact we will hit that 50% this year, two years ahead of schedule.”

She added that during the Covid-19 pandemic “there was quite a strategic decision to take on whether we would row back on those commitments”.

But she told the MPs: “But we felt as a management team it was something we had undertaken to do, and we were seeing real change in the editorial output in the channel, and we should continue to push forward on our nations’ and regions’ commitments.

“So I am quite delighted we will hit 50% now two years early, because during the stress of the pandemic we could have made other decisions.”

Ms Mahon went on to state that if Channel 4 was privatised it was “most likely” that there would be less cash to spend on new programmes.

She said: “It is definitely true to say that if Channel 4 was privatised you would have to take money out of the company to give it as a commercial return to private shareholders.

“It most likely that that money would come from a reduction in content spend.

“At the moment we as an organisation spend a higher percentage of revenues on content than competitor organisations, partly because we make lots of things like the Paralympics, we try and nurture small and medium companies, and we create lots of content like It’s A Sin, or the tennis which we had on last week with Emma Raducanu. Those things don’t make us a profit.

“So it is most likely that you would reduce spend on content because it is by far the biggest expenditure and because we spend above market.”

She stated that privatisation would mean “the company would to make profit in order to create a return for shareholders, where as at the moment we don’t seek to create a profit”.

Ms Mahon continued: “I think the questions are all about what Government and Parliament want Channel 4 to do.

“Our current strategy is very much about supporting small and medium businesses, ensuring that we invest money in them and they go on to make money through exports and through the growth of their businesses.

“The second thing we are very focused on doing is shifting to being truly representatives across the UK. That takes time. That clear shift to 50% spend in less than three years has been going some, but that’s important.

“And the other thing we’re doing is a real focus on ensuring we are bringing young people into the industry.

“I do not believe there is any data or evidence that under private ownership the company would continue to focus on those things.”

The committee also took evidence from representatives from production, film and media companies based in Scotland.

Jane Muirhead, Raise The Roof Productions managing director, told MPs privatisation would be “devastating” for the industry in Scotland, warning it would be left with “very little” as “everything would be pulled back within the M25”.

She said: “I think that if Channel 4’s remit were to change and it became privatised, I think what we’re doing is pulling up the drawbridge, in effect, saying to this next generation of talent that’s coming through: “don’t ever think about having the ambition of starting your own business.

“Yeah you can work in the industry, but you’ll always work for someone else and the possibility is that you’ll have to go to London to actually build your career.”

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