U.K. broadcaster Channel 4 is to slash its content budget by £150 million ($185 million) and make £95 million ($118 million) of operational savings in a bid to navigate the economic impact of the Covid-19 outbreak.
The broadcaster said today that the cuts come against a backdrop of a plunging advertising market, for which it relies on for most of its revenue. C4 said the ad market is set to be down in excess of 50% over April and May.
Channel 4’s executive board and non-exec board are to take a voluntary 20% pay cut and suspend 2020 bonuses for executive directors. This includes chief executive Alex Mahon and director of programs Ian Katz.
It is also to access the government’s Coronavirus Job Retention Scheme, and will furlough around 10% of staff.
C4 said the reduction of its content budget in 2020 – down from the £662 million ($820 million) spent in 2018 – reflected both the difficulties of producing programs and films in the current environment, as well as decisions to delay or cancel some content across Channel 4, E4 and More 4 across the year.
The broadcaster added that the further £95 million of savings will be achieved through a review of planned projects and investments, including a reduction in marketing budgets.
The broadcaster has also initiated a full recruitment freeze for all but business critical roles and a review of all third-party costs.
Channel 4 insisted that it will continuing to commission and develop content for 2020 and 2021 – with ringfenced funding for small, nations and regions and independent producers led by black, Asian and minority ethnic (BAME) executives.
Alex Mahon, Channel 4’s CEO said: “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.”
Director of programs Ian Katz set out details of his revised commissioning strategy in light of the reduction in overall content spend, saying C4 will still be seeking new shows for both 2020 and 2021, though at a slower tempo over the next few months as a result of the budget reduction.
Katz said C4 will spend over £10 million ($12.4 million) on shows capturing the impact of the pandemic, with at least 50% of this spend committed to small, nations and regions or BAME-led production companies.
To ensure a continued pipeline of ideas coming through for the end of this year and into 2021, C4 will also ringfence £3 million ($3.7 million) of development funding across 2020, and at least 50% of this will also be prioritized for small, nations and regions and BAME-led producers.
Katz said: “We recognize 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 last two weeks Channel 4 has commissioned a range of programming in response to the crisis, including pulling forward “The Steph Show” to go live each day, and a number of shows under the banner of “Stay at Home Academy,” such as “Grayson’s Art Club,” “Kirstie’s Crafting and Stay at Home,” and “Dick & Angel’s Make, Do & Mend.”
The channel has also commissioned a number of factual and current affairs programs about the impact of the pandemic on the U.K., such as “NHS Heroes,” “Pandemic: Can Science Beat Coronavirus,” “Corona Street,” and “What Did South Korea Get Right?”