LONDON — The BBC is planning to save £400 million ($583 million) over the next three years by freezing pay for its execs and cutting talent fees.
At a media confab in London on Thursday, the Beeb’s director-general Mark Thompson said the cuts were necessary.
“Given the falling away of household growth, the collapse of the commercial property market and pressure on commercial revenues, without a further significant reduction in spending we would exceed our statutory borrowing limit,” he said.
All U.K. TV-watching households have to pay a license fee that funds the pubcaster, so the fact that U.K. household growth is in decline affects the BBC’s coffers.
With 7,200 staffers pinkslipped during the past 4½ years, and an additional 1,200 job cuts in the pipeline, Thompson said the BBC had experienced a bigger restructuring and redundancy program than any other U.K. broadcaster.
Answering critics who claim the Beeb is virtually immune to the downturn by virtue of its public funding, Thompson said the idea that the pubcaster was “swimming with cash and people” was outmoded.
However, he admitted that to hard-pressed commercial rivals the guaranteed license fee funding, which generates around $4.7 billion a year, could seem “disproportionate and unfair.”
In the face of the “abyss” faced by commercial media outfits, he repeated the BBC mantra that the org would take “tangible, measurable steps to partner, support and share some of its advantages with other media players.”
He said BBC Worldwide, the pubcaster’s commercial arm, and Blighty’s hybrid pubcaster Channel 4 had made “real progress” over a collaboration that “could play a significant part in addressing Channel 4’s funding issues.”
Last week it emerged that the BBC had signed a preliminary agreement to share its news resources with commercial rival ITV.
“The things I have talked about, the undermining of journalism (for instance), these are global phenomena just as visible in the U.S., where there’s no powerful public broadcaster as there is in Britain,” Thompson said.
“If directed in the right way, the BBC’s revenue, technology and know-how could make a significant difference to the way these market failures play out.”