Directors of Channel 4 have hired a prominent team of media industry bankers to advise on alternatives to a potential government sale of the broadcaster that could take place as soon as next year.
Sky News has learnt that the state-owned company has drafted in Alvarium, a merchant banking and wealth management firm, to draw up a blueprint of options for its future funding requirements.
The appointment of Alvarium, which is understood to have taken place some weeks ago but has not been publicly announced, underlines Channel 4’s board’s determination to resist an outright sale.
Alvarium’s advisory team is led by Jonnie Goodwin and Julian Culhane, the founders of LongAcre Partners and Lepe, two firms which have worked on deals for numerous media companies, including the BBC.
Industry sources said Alvarium would assist Channel 4’s board in talks with its shareholder and other stakeholders, with the picture expected to become clearer once the government publishes its response to a public consultation sometime in 2022.
The bank’s work is also likely to include assessing alternative revenue streams which could supplement its existing advertiser funding-led model.
Sky News revealed in September that ministers had appointed JP Morgan to provide corporate finance advice on Channel 4’s remit, ownership and obligations.
A privatisation process has been widely expected for some time amid tensions between Channel 4 and Boris Johnson’s administration.
Media groups including Discovery, which is in the process of merging with WarnerMedia to form Warner Bros. Discovery, are reported to be interested in a takeover of Channel 4.
This week, it emerged that the government had blocked the reappointment of two Channel 4 non-executive directors, leaving the broadcaster – which has a statutory diversity objective – facing the likelihood of having an all-white board.
Prominent media figures including Sarah Sands, the former Today Programme editor, and Dawn Airey, a former ITV and Sky executive, were appointed this month as Channel 4 non-executive directors.
Channel 4’s chairman, Charles Gurassa, is to step down within weeks, with a process to recruit his successor only just having got under way.
It emerged last week that Mr Gurassa would become chairman of Guardian Media Group.
Opposition to the broadcaster’s privatisation has become increasingly vocal both from within Channel 4 and the independent television production sector in recent months.
A recent report by Ampere Analysis, an industry consultant, suggested that as many as 60 ‘indies’ could be forced to close if Channel 4’s commissioning budget is slashed under a new owner.
John Whittingdale, the former culture secretary, said in a speech during the autumn that Channel 4 would “at some point soon… need cash” if it wanted to grow.
“Without it, Channel 4 won’t have the money to invest in technology and programming, and it won’t be able to compete with the streaming giants,” Mr Whittingdale said.
“So the next obvious question is where does that cash come from? It can either be on the back of the taxpayer, or it can come from private investment.
“And it’s our strong position – as a point of principle – that the borrowing of a commercial TV channel should not be underwritten by a granny in Stockport or in Southend. Instead, we can help it unlock that much-needed investment.”
A final decision, which will be made by Nadine Dorries, the new culture secretary, will require the prime minister’s approval, but industry sources say any sale process would not commence for another 12 months.
Channel 4’s chief executive, Alex Mahon, recently argued that its ability to invest outside London, having recently opened a national headquarters in Leeds, would be threatened by privatisation.
Mr Gurassa, meanwhile, has launched an outspoken attack on the potential sale of the company, saying that it “leaves us as a board deeply concerned given our statutory responsibility to deliver Channel 4’s remit”.
He accused ministers of “sleepwalking into the irreversible and risky sale of an important, successful, and much-loved, British institution.”
The chairmanship vacancy presents the government with the opportunity to appoint an individual who is more politically aligned to it – as has been the case with other board positions overseen by the Department for Digital, Culture, Media and Sport.
Richard Sharp, a former Goldman Sachs banker and close ally of Boris Johnson, was named as the new BBC chairman, while George Osborne, the former chancellor, recently landed the chairmanship of the British Museum, a prestigious cultural job.
A Channel 4 spokesman confirmed Alvarium’s appointment.