Channel 4 has announced a huge cost-cutting exercise to survive, ignited by the coronavirus outbreak.
Though publicly owned and run as a non-profit organisation which invests its available income into commissioning content, Channel 4 is entirely commercially funded, the vast majority of which is from television and digital advertising.
Channel 4 has prudently managed its finances over successive years and is well equipped to navigate normal cyclical pressures on the advertising market, but the unprecedented impact of this crisis on the worldwide and UK economy has had a severe effect on the demand for advertising in the UK – with the TV ad market set to be down in excess of 50% over April and May, and limited future visibility.
Channel 4 announced the following plans to keep afloat during the next few months:
► Reduction of 2020 content budget by £150 million. This reflects both the difficulties of producing programmes and films in the current environment, as well as some extremely difficult decisions to delay or cancel some content across Channel 4, E4 and More 4 across the year.
► All executive and non-executive Board members have taken an immediate voluntary 20% pay cut.
► A further £95m of savings will be achieved across the organisation through a full review of planned projects and investments, including a reduction in marketing budgets.
Channel 4 said that it was focused on safeguarding the jobs and protecting the livelihoods of staff but have undertaken a comprehensive review of people costs, which will include a full recruitment freeze for all but business critical roles and a review of all third-party costs.
Additionally, the broadcaster will participate in the government’s Coronavirus Job Retention Scheme and today we will be opening discussions on furloughing with around 10% of Channel 4 staff, whose roles are impacted by the current circumstances.
Alex Mahon, Channel 4’s CEO said, “Over the last few weeks Channel 4 has demonstrated the importance of its role as we have helped navigate our audience, particularly young and hard to reach viewers, through these challenging times – with record viewing figures for Channel 4 News including over 200 million views to our news content on social media, and our ‘Stay at Home’ on-screen graphic reaching almost two thirds of the UK population.
“However, as a commercially funded business the Covid-19 outbreak has had a severe impact on our advertising revenues and so we are taking action now to manage our costs appropriately and ensure that we both protect our staff and our ongoing ability to serve our audience.
“We know that these are exceptionally challenging times for everyone in the UK, particularly many of the producers, talent and freelancers we work with across the television and creative industries and we are committed to safeguarding our long-term ability to invest in distinctive and challenging content and create jobs and opportunities in the sector across the UK.”