U.K. broadcaster Channel 4’s revenues hit £995 million ($1.3 billion) in 2016, but outgoing CEO David Abraham warned Wednesday that the commercial TV environment has become tougher following the Brexit vote, with no sign of when it will get better.
Both Abraham (pictured) and programming chief Jay Hunt are leaving the broadcaster this year, with Alex Mahon taking the chief executive role in September. Hunt’s successor has yet to be named.
With increased competition from digital rivals and a British advertising market in negative territory, Channel 4 said it dipped into its cash reserves last year, and will do so again in 2017 if it needs to make up any shortfalls to fund programming.
Abraham said at a news conference Wednesday that the ad market had been growing at more than 4% before last year’s vote by Britain to exit the European Union, and was now in negative territory.
“We’ve been through these cycles before, but I’m very confident we have got the resources and ability to adjust our spend patterns to make sure we keep doing our job and investing in U.K.-originated content,” Abraham said. “Visibility is not what it was 12 months ago, so we have to make sure we plan around that, and that’s what we’re doing.”
Channel 4 has about £500 million in cash reserves, about £100 million of which is in the form of its London headquarters, which it fully owns. The broadcaster successfully fought off efforts to privatize it, but a consultation looking at moving its headquarters outside London is underway.
Abraham opposes the move, noting that 55% of Channel 4’s first-run programming came from outside of the British capital last year even though the broadcaster is headquartered there. Chairman Charles Guarassa added that Channel 4 was keen to have more programming from outside London, but if the government tried to force a move against the board’s wishes, it would require legislation.
The broadcaster has been investing in content and tech businesses via its Growth Fund, and Abraham said there are more deals in the pipeline.