Discovery exploring bid for Channel 4 UK, report claims

(Logo courtesy Channel 4 UK, Graphic by The Desk)

Discovery Communications is reportedly exploring a potential bid for British broadcaster Channel 4, according to a report.

The bid comes as lawmakers in the United Kingdom are considering plans to transform Channel 4 from a public broadcaster into a fully commercial outlet.

Channel 4 was established to provide alternative television programs compared to mainstream shows and movies aired by the British Broadcasting Corporation (BBC) and commercial broadcaster ITV.  While Channel 4 is considered a public broadcaster akin to the BBC, it receives no funding from a mandatory television license paid by British households and instead generates revenue through advertisements.

In May, The Desk reported on comments made by Britain’s secretary for culture and media, in which he appeared to back a full privatization of the network. If plans go through, the official said Channel 4 could be privatized as soon as 2024.

Other lawmakers say Channel 4’s mission to provide alternate programming that is sourced by studios unaffiliated with the BBC or ITV has largely been met by upstart streaming services, including Netflix, Amazon Prime Video and Disney Plus.

Should the network be privatized, the government would solicit bids from companies interested in acquiring Channel 4’s media assets and associated broadcast licenses.

At least one company, Discovery Communications, is reportedly interested in that part of the process, according to a report published Monday by the Telegraph newspaper. Citing unnamed sources, the Telegraph said Discovery had already begun exploring a potential bid for Channel 4 as part of a broader, global strategy focused on free-to-air networks that do not require a pay television subscription.

Discovery would be no stranger to Europe: It is a financial investor to the newly-launched British channel GB News, which aims to challenge BBC News and Sky News in that country.

It also has been on an acquisition tear over the last few years, buying its way to become the sole owner of pan-Europe sports channel Eurosport, which currently holds the broadcast television rights to the Tokyo Olympic Games.

In addition to Eurosport, Discovery has acquired smaller broadcast networks in Germany (Tele 5) and Poland (Metro) while launching regional variants of flagship American network and Animal Planet.

A bid by Discovery is far from certain: Several years ago, it tried to acquire the broadcast assets and license of Channel 5, a commercial network in the United Kingdom, only to lose out in the process to Viacom Corporation, the owner of MTV and Comedy Central (Viacom later merged with CBS to become ViacomCBS).

Discovery is also in the process of merging its assets with AT&T’s WarnerMedia as part of a new company expected to form next year. That merger, which will create a new company called Warner Bros. Discovery, will cost at least $43 billion to complete, and could put Discovery at a financial disadvantage should other companies engage in a bidding war for Channel 4’s license.

No other companies were named by the Telegraph as expressing an interest in Channel 4’s assets, but other media conglomerates with the financial backing and potential interest to explore a bid for Channel 4’s license include the Walt Disney Company, RTL Group and Comcast Corporation, according to an analysis by The Desk.

Of those three, RTL Group — with its headquarters based in Cologne — would likely face the least regulatory scrutiny. The company currently owns radio and television channels in Luxembourg, Germany, the Netherlands, France and Belgium.

The Walt Disney Company tried years ago to launch a British free-to-air channel in the United Kingdom and Ireland. Called ABC 1, the channel mostly distributed programs from its flagship stateside network. It closed three years later due to low interest.

Since then, Disney has made a heavy investment in content for its global Disney Plus streaming service, adult-oriented streaming product Star and American streamer Hulu. An acquisition of Channel 4’s media assets and broadcast library could help Disney expand its intellectual property offerings across its streaming services.

Comcast would likely face the most resistance out of the three: In 2018, the company agreed to spend $39 billion to acquire Sky, a satellite pay television service in the United Kingdom.

The takeover deal happened two years before Comcast debuted its domestic streaming service Peacock, and its acquisition of Sky allowed Comcast to distribute Sky-produced programs like “Brave New World” and “Intelligence” under the “Peacock Originals” brand.

As with Disney, an acquisition by Comcast would give the company even more intellectual property for its streaming initiatives. Comcast says it plans to offer a variant of Peacock in the United Kingdom later this year; an acquisition of Channel 4’s content could help make Peacock more attractive to British viewers.

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