Archant is planning to sell its local TV service, putting staff at risk of redundancy, as the regional publisher’s chief executive admits the station has not been in profit since launching three years ago.
Proposals are to sell Mustard TV to That’s TV Group, which claims to be the UK’s largest local TV licence operator, in exchange for a stake in the business – making Archant a minority shareholder.
Mustard TV, which is based at Archant’s Prospect House headquarters in Norwich and broadcasts to 162,000 homes in the Norfolk city and the surrounding area, went live in March 2014.
It was the second UK local TV station to be granted a license by Ofcom as part of a Government-backed scheme that was subsidised by £40m from the BBC licence fee for the first three years.
In a statement, Archant said: “We are proposing to sell Mustard TV to That’s TV Group, in exchange for a stake in the That’s TV Group business.
“We have consistently said that the success of local TV will come from consolidation and are excited to be a minority shareholder in a company with a significantly larger portfolio of local licences.”
In an email to staff, seen by Press Gazette, Archant chief executive Jeff Henry said: “The local television market is difficult however, the audience reach for Mustard is restricted by the licence we operate under, and the revenues we are able to generate have not proved sufficient to enable us to make a profit since the station launched.
“I have consistently said that the success of local Television will come from consolidation which can bring the right mix of shared investment and skills needed to make this financially viable; we simply can’t afford this on our own.”
He added: “That’s TV operate their channels using a different staffing and operating model than the one we use in Mustard, with a greater use of shared and freelance resources across their network.
“If the proposal goes ahead they have indicated they will not need the current Archant staff to operate the Norwich station but we are seeking where at all possible to avoid making redundancies by retaining as many employees as we can within Archant by finding alternative roles.”
If it goes ahead, the sale is expected to be completed in September.
The channel is expected to continue broadcasting from Archant’s Norwich offices for the first year after being sold, but Henry said that “operationally, the Norwich station will work closely with its new sister station in Cambridge”.
That’s TV is a privately-owned business with a network of ten Local TV franchises in Basingstoke, Guildford, Lancashire, Manchester, Oxford, Cambridge, Thames Valley, York, Carlisle and the Solent area.