Channel 4 outlined a series of measures today (April 8) to help the British pubcaster navigate the economic impact of the COVID-19 pandemic, which it said has had an “unprecedented” impacted on advertising revenues in the UK.
Most notably, C4 is slashing its content budget by £150 million, which it said reflects the difficulties of producing programs and films in the current environment, as well as “some extremely difficult decisions” to delay or cancel content.
The broadcaster stated it plans to continue to commission and develop content for 2020 and 2021 at a “slower tempo,” with ringfenced funding for small, Nations and Regions, and BAME-led independent producers.
Executive and non-executive board members will take a voluntary 20% pay cut, and 2020 bonuses for executive directors will be suspended.
C4 is entirely commercially funded, the vast majority of which is from television and digital advertising, which the broadcaster expects to drop in excess of 50% over the course of April and May.
The company said it is “well equipped” to navigate “normal cyclical pressures on the advertising market,” but the impact of the crisis globally has had a “severe” impact on the demand for advertising in the UK.
C4 plans to achieve £95 million in savings across the organization through a review of planned projects and investments, including a reduction in marketing budgets. The broadcaster has also drawn down on its commercial £75 million revolving facility that has been in place since 2018.
Though C4 stated its “focused on safeguarding the jobs and protecting the livelihoods” of staff, it has undertaken a review of “people costs,” which will include a full recruitment freeze for all but “business critical roles” and a review of “all third party costs.”
Additionally, the company plans to participate in the UK government’s Coronavirus Job Retention Scheme and is opening discussions April 8 around furloughing around 10% of its staff.
Ian Katz, C4′s director of programs, set out further details of his commissioning strategy in light of the reduction in overall content spend.
The pubcaster plans to spend more than £10 million on shows “capturing the impact of the pandemic,” in addition programs that keep viewers at home entertained. At least 50% of this spend will be committed to small, Nations and Regions, and BAME-led indie producers.
C4 will also ringfence £3 million of development funding across 2020, and at least 50% of this will be prioritized for the above groups.
Alex Mahon, Channel 4 CEO, said in a statement: “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.”
Katz added: “The coronavirus crisis has hit all commercial broadcasters with a double whammy of lost production and dramatically reduced revenues but it also poses a profound creative challenge which our indie partners have risen to with remarkable ingenuity, speed and resourcefulness… 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.”