Channel 4 has taken one of the biggest steps in its 40-year history by acquiring a majority stake in a production company for the first time.
The network has used its nascent Creative Investment Fund (CIF) to acquire Murder Trial producer Firecrest Films. Financial terms were not disclosed but we know Channel 4 now holds a majority stake with plans to take full ownership over time. Channel 4 previously had a 25% minority stake in Firecrest via its Indie Growth Fund.
The deal represents a huge moment for Channel 4 as it gears up to launch its in-house productions unit. In May, it revealed that it would open the CIF to back production companies with commercial potential. Channel 4 declined to reveal the value of the company’s indie investment war chest at the time. The network has cash reserves of £111M ($151M).
Channel 4 has been working with Firecrest for years and the Scottish company has made many Channel 4 shows including Secrets of the Supermarket Own-Brands, Dispatches: The Truth About Nike and Adidas and Rescue: Extreme Medics, while it is behind the BBC’s popular Murder Trial series and has also made projects for the likes of Prime Video. The indie is run by respected industry vets Nicole Kleeman and Iain Scollay, who picked up minority funding from Channel 4 in 2017.
Based in Govan, Scotland, Firecrest currently employs almost 100 staff and freelancers and is renowned for its investment in new talent. In the last three years it has given 25 people their first jobs in TV, it said.
Kleeman said: “Over the last eight years our partnership with Channel 4 has taken us from a small regional indie to one of the UK’s most significant documentary producers. This new relationship with Channel 4 will give us the security to futureproof the business and continue to grow talent and tell stories.”
Channel 4 interim CEO Jonathan Allan added: “We have supported Nicole & Iain in their outstanding Scottish indie with their high-quality and critically acclaimed factual content for the last eight years. So I’m delighted that Channel 4 is now able to develop this important relationship with Firecrest Films through the first acquisition from the Creative Investment Fund, supporting our new strategy to invest in and own IP. This strategy will enable us to diversify revenues and secure Channel 4’s long-term sustainability through generating new income streams that are not wholly reliant on the advertising market.”
Channel 4 can now own British IP for the first time in its history and is simultaneously developing its in-house productions unit. The network already has minority stakes via the Growth Fund in the likes of Adolescence co-producer Warp Films, Two Rivers Media and Duck Soup, amongst others. The move has been met with backlash from producers who have in the past used Channel 4 commissions as a bedrock to build their businesses by retaining the IP and selling it around the world. Channel 4 has always argued that it was the UK government that gave it the power to launch an in-house unit and buy majority stakes in companies.
Channel 4 now joins the BBC and ITV in having majority stakes in British production houses. The BBC and ITV have been taking these stakes via their studios arms for years and many of the UK’s biggest indies are owned by the pair. In May, Allan acknowledged that Channel 4 would not be able to compete with deep-pocketed rivals like ITV Studios.
The Firecrest investment was negotiated by Caroline Murphy, who has led the Indie Growth Fund since she joined Channel 4 in 2019. Firecrest was advised by Helion Partners and Lee & Thompson.