It is 12 months, almost to the day, since sense prevailed and the government abandoned its reckless plan to privatise Channel 4. The threat to sell the broadcaster after 40 years seemed to be motivated chiefly by political spite, rather than any coherent idea to improve the lot of the UK’s creative industries. Channel 4’s management did well to defend its corner so robustly. A state-owned entity that works with independent producers, and pays its way by funding itself commercially, adds greatly to biodiversity in TV-land. A sale to a foreign buyer (probably) would have been an irretrievable error.
One cannot say, however, that Channel 4 has gone from strength to strength since the big reprieve. The TV advertising market in 2023 probably had its biggest fall since the 2008 financial crisis – chief executive, Alex Mahon, referred to “market shock territory” in testimony to MPs in November. After three years of surpluses up to 2022, Channel 4 expects two years of losses. It has cut back on commissioning to extend budgets, adding to wider woes among independent producers, some of whom have complained bitterly about late cancellations.
Now comes what the Guardian revealed is likely to be a heavy round of job losses – possibly as many as 200 – among its own workforce, that is thought to have increased from the 1,200 recorded at the end of 2022. Mahon didn’t specify numbers in her internal memo on Monday but did confirm “there will be an impact on jobs”.
The cuts look inevitable given the bleak market picture painted by Mahon and her chair, Sir Ian Cheshire, at the select committee seven weeks ago. And a complicating factor is the need to keep investing in digital infrastructure to match the pace of viewers’ switch towards streaming. ITV et al face the same pressures. Nobody is pretending this stuff is easy when the advertising market is on the slide.
But Channel 4 could also do itself a favour at this point by demonstrating restraint on pay in its upper ranks. News of bumper bonuses for the feelgood year of 2022 landed horribly in July 2023, by which time the pain in the independent sector – and among its largely freelance staff – was being felt on the ground.
Mahon was awarded almost £1.5m for 2022, comprising £741,000 in fixed pay, £594,000 in annual bonus and £155,000 as a special “retention” bonus to cover the period when the privatisation risk was in the air. The retention element was subsequently “deferred indefinitely”, as it was for chief operating officer, Jonathan Allan, and chief content officer, Ian Katz, but not before it became a flashpoint with the production sector.
One focus for 2023’s awards, then, will be on the regular performance-related bonuses for the top trio. Commissioning deferrals, an annual loss and now job cuts, you would think, would make the case for giving bonuses a year off. Except that’s not what Cheshire said when asked directly at the select committee if executive remuneration would fall.
Pressures are coming from the ad market, replied Cheshire, “but the rest of the performance on remit and public service is going very well”, adding that “we will work out what the score is at the end of the day.” If the score still adds up to bonuses at the top, one suspects Channel 4 will lose a chunk of the goodwill it generated during the privatisation kerfuffle.
Not all the challenges for the independent sector can be heaped on Channel 4, it should be said. The squeeze is coming from all directions. But it is the broadcaster most closely aligned with the UK indies and seen as its partner. At times like these, and when you’re also making cuts among your own staff, bosses have to be seen to share the pain.
