BBC outlines $228 million cost savings plan

The UK pubcaster has revealed the details of a £150 million (US$228 million) cost savings plan that will see cuts in sports rights and the television budget, set to impact factual and entertainment.
November 18, 2015

The BBC today (November 18) revealed the details of a £150 million (US$228 million) cost savings plan that will see cuts focused on sports rights and television.

The restructuring comes as the UK pubcaster takes further steps to bridge a funding gap in license fee revenue caused by a loophole allowing users to access BBC content via iPlayer and mobile without using a licence.

The BBC in July indicated it would cut up to 1,000 jobs as part of a restructuring effort that would merge divisions and cut down management layers to deliver about £50 million in savings. About 300 jobs have already been affected since the summer.

In addition to these reductions – expected to be completed in 2017 – today’s plan outlines £35 million in cuts to the BBC’s TV sports rights budget.

“Meeting this savings target will be tough, particularly given the high levels of inflation in the market. We therefore anticipate this will lead to the loss of some existing rights and events,” reads a release.

“We have already made some tough choices which have contributed to the savings, for instance around the Open Golf. However, we have also recently secured a series of important rights – including Wimbledon, Premier League highlights, live coverage of Euro 2016 and 2020 football championships and Six Nations rugby shared with ITV.”

Meanwhile, a further £12 million in savings are to come from the TV budget. Through drama will be protected, “a range of other genres” will face cuts, including reductions in factual, comedy and entertainment. The pubcaster adds that it is still committed to Saturday night programming and will also use the savings from The Voice UK - which is reportedly moving to British commercial broadcaster ITV – to develop new, home-grown formats.

Elsewhere, £12 million will be cut from BBC online, £5 million from news, £20 million from long-term contracts and other costs, and a final £16 million from other cross-cutting areas, such as distribution costs, a “phased exit” from the broadcast Red Button service and more savings from BBC online.

The BBC notes that today’s £150 million savings plan is part of the £700 million overall savings it must find “due to the flat licence fee agreed in the summer and the need to fund the transformation the BBC must undertake for the future.”

Plans for the remaining £550 million in savings that need to be met by 2021/22 are to come in the spring. The pubcaster notes that these cuts will include broad service and “major structural changes.”

“The BBC has and is doing everything possible to make sure the impact on the public is minimized,” said BBC director-general Tony Hall (pictured) in a statement. “Wherever possible we’re targeting savings by creating a simpler, leaner BBC.

“But cuts to budgets for programs and services are unavoidable. No director-general wants to announce reduced spending on services that the public love. This is very tough, but the BBC’s financial position means there is no alternative.”

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