UK features operation FilmFour is to be spun off from parent broadcaster Channel 4 into a new company, 4 Ventures Limited.
Channel 4 confirmed in a statement on Monday that the new holding company would include the film production, distribution and sales subsidiary alongside the channel's commercial ventures such as pay-TV services FilmFour and E4. The company encompasses Channel 4's new media activities and will have its own managing director.
The restructuring, to kick in this year, opens the way for businesses in 4 Ventures to be partially sold off. Channel 4 said it is open "in the short-term" to partners investing in the holding company's individual businesses. In the longer term, Channel 4 may find a strategic or financial partner for the entire holding company, which observers have likened to the BBC's commercial arm BBC Worldwide.
The venture, which will have separate accounts to Channel 4, is also aimed at bringing greater transparency to the channel. The broadcaster was criticised last year by former Channel 5 chief David Elstein for a $367.4m (£250m) difference between its revenues and its programme budget.
Channel 4 said the $367.4m sum went on areas including overheads, future rights, new media, pay-TV and FilmFour's production and development spend. FilmFour made a $734,700 (£500,000) pre-tax profit for 1999, although it did not reveal how much Channel 4 and the FilmFour pay-TV service paid for rights.
Rival broadcasters also rail against the channel for enjoying public status benefits such as free spectrum space but still tapping revenues from advertising and commercial ventures. While FilmFour is judged to have fulfilled its public remit by investing in UK films, critics have pointed to E4's expensive US programming such as Friends and ER. The Conservative Party, the UK's main political opposition, recently pledged to privatise Channel 4 if it wins the election expected in May.
"Our aim is to ensure we ring-fence our investment in the main Channel 4 service, preserving it as the strong public service foundation on which all other businesses are built," said Michael Jackson, Channel 4's chief executive. "4 Ventures will allow us to manage our new businesses more aggressively to ensure they open up new sources of revenue and offer a return on Channel 4's investment, helping to insulate the core service against more competitive times ahead."