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Pact has delivered a blistering critique of Channel 4‘s newly unveiled plans to acquire production companies outright and launch in-house production capabilities.
The U.K. screen sector trade body for independent production and distribution companies revealed it was given virtually no advance notice of the sweeping changes, receiving only a summary of the proposals “late yesterday” before the public announcement on Wednesday.
“Having fought very hard against the privatization of Channel 4, this is a bitter pill to swallow for the indie sector,” said Pact CEO John McVay in a statement that signals growing tensions between the public service broadcaster and the production community that has supplied its content for over four decades.
The controversy centers on Channel 4’s intention to transform its existing Indie Growth Fund into a new Content Investment Fund that will shift from supporting independent producers to fueling the broadcaster’s own production ambitions. While Channel 4 executives Alex Mahon and Jonathan Allan framed the move as essential to ‘generate new income streams’ and ensure ‘long-term sustainability,’ Pact said it was “bitterly disappointed,” and noted that Channel 4’s strategy to wholly acquire companies would “directly impact market share in an already fragile market.”
The trade body expressed outrage at what it perceives as a stark contradiction between the current strategy and Mahon’s previous characterization of a “measured manner” approach when addressing the parliamentary Culture, Media and Sport Select Committee – the influential cross-party group that oversees British media policy – in April.
Pact’s statement raises pointed questions about Channel 4’s financial stewardship, challenging why the broadcaster is only now discovering “savings and efficiencies” to fund a new in-house development team “after years of diminishing program budgets.” The organization has demanded that the Channel 4 board of directors publish specific proposals to substantiate claims that indies will ultimately benefit from this restructuring.
Perhaps most alarming to independent producers is the revelation that Channel 4 intends to house both its commissioning team and the new in-house production unit in the same physical space. Pact deemed this arrangement “unacceptable,” arguing that regardless of promised guidelines, the situation inevitably creates an unlevel playing field when “a commissioner meets a member of the development team in the Channel 4 canteen queue.”
Variety has reached out to Channel 4 for comment.
The confrontation comes at a pivotal moment for Channel 4, which recently reported streaming views up 13% to a record 1.8 billion, though still posting a pre-tax deficit of £2 million ($2.6 million) despite significant improvement over the previous year.
As Mahon prepares to exit the broadcaster in July, leaving incoming interim CEO Jonathan Allan to navigate these contentious waters, the indie production sector appears poised for a protracted battle over what many view as an existential threat to the unique creative ecosystem that has defined British television for decades.
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