Channel 4 posted its largest deficit of all time final yr in what was a chastening monetary yr, with content material boss Ian Katz deciding to reject his bonus.
The Gogglebox community, which initially of 2023 averted being offered off by the federal government, revealed a deficit of £50M ($65M) for full-year 2023, with bosses stressing immediately at an annual report briefing that it had prioritized content material spend over maintaining the deficit down.
No Channel 4 deficits in recent times have come near the £50M, with the earlier highest being £27M in 2012. A smaller deficit is predicted this yr, CEO Alex Mahon and Katz mentioned immediately, however the second half of 2024 particularly has nonetheless been difficult financially due partly to the federal government’s upcoming fall funds and its influence on client confidence. “We selected to prioritize content material funding and file a big content material deficit in 2023 in consequence,” Mahon mentioned as she launched the briefing. “The only largest contribution we will make is what we spend on British IP.”
Mahon and Katz careworn that the file deficit got here after three consecutive years of huge surplus, which totalled virtually £180M and may nonetheless be used to assist with content material spend and cashflow. Channel 4’s £75M revolving credit score facility can be used to “handle money circulation all year long,” in line with new finance boss Lucy Thomas. And Channel 4 is just not the one British broadcaster combating a deficit. The BBC’s annual report revealed a near-doubling of its deficit to virtually £500M just lately because it introduced 500 extra layoffs.
“We needed to change course a bit”
Channel 4 CEO Alex Mahon and Ian Katz, Chief Content material Officer
Getty/Channel 4
Channel 4 made its second-highest authentic content material spend of all time final yr of £520M, it revealed immediately, together with spending £663M on exhibits total – each of which had been down from a file 2022 however nonetheless excessive and meant it spent round two-thirds of its turnover on exhibits.
However in a yr that was characterised by bitter relations with indies amid the tough monetary state of affairs, Katz mentioned “we needed to change course a bit” from what was initially deliberate to be splashed on content material.
“We had been planning a better
funds and we needed to change tack when the income image modified,” he added. “So we commissioned extra initially of the yr and fewer on the latter a part of the yr, and needed to delay some content material and never transfer ahead with one or two tasks. This all had powerful penalties.”
Mahon added: “We nonetheless spent greater than we may have achieved which is why we recorded such a big deficit however we needed to stability that all year long.”
With the indie sector’s criticism entrance of thoughts, the report revealed that Katz had foregone his total bonus for the yr, whereas Katz, Mahon and Chief Working Officer Jonathan Allan’s mixed pay fell to a 12-year low.
Deadline had initially revealed a number of months again that the trio would all take bonuses – a choice that was criticized in some quarters of the indie sector because it got here amid a 250-person layoff program – however Katz then determined to reject his because of the ache suffered by producers, Mahon mentioned.
“Ian declined to take an exec bonus which all of us help him in as a choice notably as a result of he feels near the indie neighborhood, the complexity of final yr, the downturn and what [indies] went by,” she added. “For him that was an vital determination when it comes to his work with indie producers.”
Mahon added that herself and Allen took “considerably lowered bonuses in step with KPIs and the way the remuneration committee determined to award it.”
Mahon’s pay fell by one third to £993,000 final yr from its file 2022 excessive, with Katz’s almost halving to £481,000 and Allan’s dipping to £682,000.
For the third consecutive yr, Channel 4’s income topped £1B. In step with its Quick Ahead technique, revealed initially of this yr, digital income elevated 10% to £280M, which accounted for 27% of whole turnover. Related digital development is predicted in 2024.
Channel 4 immediately promoted file streaming development because it targeted on exhibits equivalent to The Piano, Large Boys and its Russell Model exposé. It mentioned it’s the solely main business broadcaster to develop total viewing in 2024 up to now, a incontrovertible fact that was being touted on the latest Edinburgh TV Pageant.
Future layoffs
The “overwhelming majority” of the 250 layoffs are actually full however there are “nonetheless a few little bits happening,” Mahon mentioned, and the CEO didn’t rule out extra layoffs within the close to future particularly in departments that target linear.
“We’ll nonetheless deal with how we handle operational prices over the subsequent couple of years,” she added. “That linear discount takes time and needs to be achieved with how the viewers strikes.”
Industrial rival ITV has enacted an analogous variety of layoffs, with the bulk taking voluntary redundancy.
