Channel 4 to make £245m of cuts in response to coronavirus
Channel 4 has announced it will cut its content budget for 2020 by £150m, with a further £95m of savings to be achieved through a “review of planned projects and investments”.
The Leeds-headquartered broadcaster said the TV ad market was set to be down more than 50% over April and May because of “the unprecedented impact” of the coronavirus crisis.
This means there will be a recruitment freeze “for all but business-critical roles” and about 10% of the staff are set to be put on the Government’s Coronavirus Job Retention Scheme. This means the taxpayer will fund 80% of an employee’s wages up to a maximum of £2,500 a month.
The 2020 bonus scheme for executive directors has been suspended and marketing budgets have been cut. “Some content" across Channel 4, E4 and More 4 across the year has also been suspended or cancelled.
Channel 4 CEO Alex Mahon 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.”
As Prolific North reported on Monday, Channel 4 has now decided to draw down on the commercial £75m revolving credit facility that has been in place since 2018.
Ian Katz, Channel 4’s Director of Programmes, added: “Despite the significant impact on our revenues we believe it is of vital public interest that Channel 4 remains able to editorially respond to this unprecedented crisis so we will be continuing to commission shows that capture the impact of the pandemic on our society, address our viewers' concerns and help them get through this difficult period.
“We recognise that this is a desperately challenging time for all our colleagues in the production sector, particularly smaller indies and freelancers, and we believe we can support them best by continuing to commission shows and developing brilliant new ones for next year, and we will be ringfencing half of both our remaining 2020 origination and development spend for small, BAME and Nations and Regions firms.
“Over the next couple of weeks our commissioners will be discussing with production partners what types of content will best serve audiences as we emerge from the crisis and into next year and we will be offering more detailed briefs on what we are looking for in 2021 later this month.”