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The privatization of the U.K.'s state-owned broadcaster, Channel 4, appears to be off, according to a leaked government letter published by The News Agents this morning.

Why it matters: The broadcaster was valued at around £1 billion and had attracted interest from at least 25 buyers, including from U.S.-based companies Comcast (via Sky) and Paramount (via Channel 5) as well as Britain's ITV, Tim writes.

The intrigue: This represents a complete reversal of the plan under current culture secretary Michelle Donelan, who instead is planning to introduce a set of reforms as part of a sustainability package.

Former U.K. culture secretary Nadine Dorries suggested in April that privatization could help the TV network compete with the streaming giants that have prioritized international content production. 

That initial decision to sell had also received near-total pushback from the British production industry.

Details: Among the biggest changes under Donelan's sustainability package would be allowing Channel 4 to produce its own content for the first time.

While the production sector had been strongly against selling Channel 4, this move could harm those companies who rely on international licensing deals. Those would go away if Channel 4 owned its own shows. 

"The government will work closely with the independent production sector to consider what steps are necessary to ensure that Channel 4’s important role in driving investment into the sector — especially in the newest, smallest and most innovative producers — is safeguarded," the letter from Donelan to Prime Minister Rishi Sunak said.

Additionally, Donelan wants to increase Channel 4's borrowing limit beyond the current £200 million ($240 million).

What they're saying: No surprise here, but Dorries is not in favor of the new plan: 

"Three years of a progressive Tory government being washed down the drain. Leveling up, dumped. Social care reform, dumped. Keeping young and vulnerable people safe online, watered down. A bonfire of EU leg, not happening. Sale of C4 giving back £2b reversed. Replaced with what?"

1 big thing: Channel 4 sale called off

Illustration of a handshake forming part of the Union Jack.

Data: Yahoo Finance; Note: USD to CAD exchange rate as of Jan. 3, 2023; Chart: Axios Visuals

A massive Canadian telecom merger continues to be in limbo, driving down Shaw Communications' stock to below the offer price Roger Communications made back in March 2021, Kerry writes.

Why it's the BFD: Heavier M&A scrutiny by antitrust regulators isn't just a U.S. matter. 

Driving the news: A Canadian Federal Court put a stay order on the C$20 billion deal following a request from Canada's Competition Bureau, Reuters reported.

By the numbers: Rogers proposed purchasing Shaw at C$40.50 per share in cash on March 15, 2021. The stock closed yesterday at C$38.63.

What they're saying: "At current levels, we will look for investment opportunities elsewhere within the Canadian telecom sector," RBC analyst Drew McReynolds said in a note yesterday and downgraded the stock, according to Reuters.

What's next: The Competition Bureau will present to the Federal Court of Appeal on Jan. 24, according to The Canadian Press. 

Canadian telecom merger remains on hold

2. The BFD: Rogers' deal with Shaw on hold

Microsoft is working to incorporate OpenAI's ChatGPT technology in its Bing search engine, per The Information.

Why it matters: Bing has been a distant second to Google for years, but the hot new AI-driven chatbot could give people a fresh reason to try out the Microsoft-owned search service, Ina writes.

Between the lines: Microsoft has already poured $1 billion into OpenAI and has a business arrangement that gives it dibs on commercial use of various technologies.

Last year, Microsoft added image generator Dall-E 2 (another OpenAI product) to a new Designer app as well as to Bing's Image Creator tool.

Microsoft has also been reselling GPT and other OpenAI technologies to large businesses.

💭 Kerry's thought bubble: Generative AI has been a buzzy topic among investors. Lightspeed Venture Partners' Michael Mignano told me it was one of his main areas of focus looking at 2023, along with the evolving creator economy. 

3. Microsoft's deal with ChatGPT

Poly, a generative AI startup focused on design, raised $4m in seed funding co-led by Felicis, Bloomberg Beta and NextView Ventures. https://axios.link/3VXg7yx 

Banijay acquired Beyond International Limited, the production company behind "Mythbusters" and "Troppo." https://axios.link/3ieoW9c

Brunico Communications, the Toronto-based publishing and events company, acquired several businesses run by the National Association of Television Programming Executives — including NATPE Global, NATPE Budapest, NATPE Streaming+ and the Brandon Tartikoff Legacy Awards — in a bankruptcy auction. https://axios.link/3VKPjRV

4. Deal flow

Apple hired Ricky Strauss as head of AppleTV+ marketing. He was most recently president of content and marketing for Disney+. https://axios.link/3IkSzjL

Tribeca Enterprises named Warner Bros. Discovery veteran Christopher Brady as CRO. He was most recently SVP of brand partnerships, strategy and innovation at WBD. https://axios.link/3jBj3mH

Kapital Entertainment hired longtime Turner casting executive Alexis Booth as head of casting. https://axios.link/3i9wzhb

Starz promoted Darren Nielson to EVP, International Networks. Superna Kalle is leaving after five years. https://axios.link/3WJVwi4

TheWrap promoted Jethro Nededog and Adam Chitwood to co-executive editors. Thom Geier is leaving. https://axios.link/3ICJtiH

Deadline promoted Kasey Champion to publisher. She was previously SVP and associate publisher. https://axios.link/3Z9FkbB

5. Movin' on up (or out)

Microsoft game makers unionize after vote passes by "supermajority" (Axios)

"The union's path to success was smoothed by Microsoft's desire to win regulatory and public favor for its proposed $69 billion acquisition of Activision Blizzard. U.S. senators had warned the Federal Trade Commission, which has the power to block the deal, about the merger's potential impact on workers," Stephen Totilo writes.

Meta expected to decide soon on fate of Trump accounts (Axios)

"Meta's looming decision on whether to allow former President Trump back on its apps will set a new precedent for how the Facebook parent company treats politicians and world leaders," Sara Fischer and Ashley Gold write.

Legal dispute with financiers of "Top Gun: Maverick" casts spotlight on controversial Russian oligarch (LAT)

"New Republic signed a more than $200 million deal with Paramount Pictures to fund up to a quarter of the budgets on 10 movies, including 'Top Gun: Maverick' ... But now, the Los Angeles production company's alleged financial ties to Russian oligarch Dmitry Rybolovlev and the Russian invasion of Ukraine are at the center of a legal dispute," Stacy Perman reports.

6. Channel surfing

Illustration of a pair of sunglasses with lenses that look like tv screens.

🐦 Situational awareness: After banning political advertising in the fall of 2019, Twitter said yesterday it "plans to expand the types of political and issue-oriented advertising allowed on the service," Ina Fried writes.

@tim_bays: "Emily the Criminal" on Netflix. Needed more Aubrey Plaza to fill the "White Lotus" void. 

@kerrymflynn: "Las Vegas" on E! Thanks to the network running a marathon of the entire series I learned of this former NBC show's existence. 

✏️ Thanks to Michael Flaherty for editing and Jay Bennett for copy editing this newsletter.

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January 04, 2023

1 big thing: Channel 4 sale called off