Channel 4 is understood to be conducting a strategic review of Box Television, its £60m joint venture with Bauer Media that broadcasts channels including 4Music and Kiss, with a range of options being considered including a potential sale.

The broadcaster bought half of what was then Emap's music television division, home to seven channels including Magic, Smash Hits, Kerrang! and The Box, for £28m in July 2007.

The deal was struck when Channel 4 was in expansion mode, under former chief executive Andy Duncan, a period which included an ill-fated £9m foray into digital radio.

However, Box Television has proven to be a sound investment, generating £4.4m in pre-tax profits in the year to the end of December 2009, in a market hit by the downturn, according to the most recent figures available from Companies House.

In that year revenues were up 7.1% to £26.6m, bucking the recession, which saw a 12% decline across the total UK TV ad market, with Channel 4 holding the ad sales contract.

The buoyant ad market of 2010 is expected to have increased revenues and profitability, in theory significantly increasing any potential sale value of Channel 4's stake above the £28m originally paid.

It is understood that the value of the stake is likely to be worth significantly less, relatively speaking, than if Box Television was sold as a single entity. It is not known if Channel 4 has held discussions with Bauer about wider options for the business. Bauer and Channel 4 declined to comment.

However, a sale is thought to be just one of the options being considered by Channel 4 chief executive David Abraham, who may consider that the broadcaster needs to hang on to some interest in Box TV beyond just handling the ad sales. In 2007 Channel 4 was even reported to be looking to take full control of the business.

Since arriving at Channel 4 in May last year, Abraham has slimmed the management structure, cutting 25% of senior managers, and axed the £20m digital innovation fund 4iP as part of an integration of how the broadcaster commissions content.

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