Staff at the channel were informed of the cost-cutting exercise in a Skype call this afternoon.
The main points mentioned to staff include:
£150million will be cut from the programme budget, partly reflected by delays in filming certain programmes.
£95million of additional savings have been earmarked, including a reduction in marketing spend. There will also be a recruitment freeze.
A review of third-party costs will be conducted.
10% of staff will be furloughed under the Government's Job Retention Scheme.
Executive Pay is cut by 20%.
It's going to draw down on its commercial revolving credit facility.
Channel 4 recently reported a surge in younger viewers, increased ratings for its main news programme and record usage of its on-demand service All4. However, the ad sales market has crashed as a result of the current situation. While larger broadcasters such as ITV have enough financial clout to say afloat for the next year, Channel 4's situation is said to be more precarious, according to trade industry reports in the past few days.
Will this have an impact on what's on Channel 4?
Channel 4 is set to commission fewer programmes that will affect the whole family of channels over the next year, including E4 and More4, which will result in the cancellation and postponement of some productions.
A review of third-party costs may indicate that Channel 4 may look at some of its distribution costs across platforms: however no concrete examples have been provided by the broadcaster.
While content is being cut, Channel 4 has at this stage not announced any reductions in the number of channels it broadcasts. However, this crisis is likely to ensure most of its offshoot HD channels remain behind a paywall on Sky and Virgin for the foreseeable future.
What has Channel 4 had to say about the matter?
Channel 4's press office has put out the following statement from its CEO, Alex Mahon: Over the last few weeks Channel 4 has demonstrated the importance of its role as we have helped navigate our audience, particularly young and hard to reach viewers, through these challenging times – with record viewing figures for Channel 4 News including over 200 million views to our news content on social media, and our ‘Stay at Home’ on-screen graphic reaching almost two thirds of the UK population.
However, 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.
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