The last time Channel 4 was generous with executive bonuses, there was a stink. That was in the summer of 2023 when the publicly owned but commercially funded broadcaster decided its bosses deserved extra for heroically staying at their posts while the Tory government was making threats (abandoned in the end) of privatisation.
The outrage from independent TV producers was so intense that the “retention” awards, including £155,000 for chief executive Alex Mahon, were deferred “indefinitely”. The rethink seemed to be a belated recognition that personal rewards for Channel 4 executives should rise and fall roughly in step with the fortunes of the independent sector they are meant to promote.
Back in mid-2023, remember, the indies were being clobbered by the advertising-led downturn in TV-land. It looked terrible for Mahon, the chief operating officer, Jonathan Allan, and the chief content officer, Ian Katz, to be handed bonuses for staying in their jobs when other people were losing theirs. Indies were laying off staff and freelancers; and Channel 4’s own “fast forward” plan in January this year saw 200 employees accelerated out of the organisation.
Lesson learned, then? Tread more carefully on bonuses given Channel 4’s unique position in the television world?
Not exactly. Channel 4 on Tuesday reported a 10% slump in revenues for 2023, a loss of £52m and – critically given that it’s the bit that matters to the indies – a cut of £50m to £663m in spending on content. But the remuneration committee decided normal performance-related bonuses (ie, regular annual ones, not retention one-offs) were in order. Not at the full levels seen in 2022, but at half the possible maximum. After “careful and detailed consideration”, the committee thought improvement in areas such as going digital and diversifying revenues should be recognised.
Was that wise when the trading climate for indies remains only a couple of degrees above freezing and talk is of trying to “survive to 2025”? The TV production sector in the UK suffered a £400m fall in revenues last year, industry body Pact reported last month. And, reading between the lines of Tuesday’s commentary, Channel 4’s spending on content is likely to be only marginally up in 2024.
Certainly Katz (formerly of the Guardian parish, but that’s irrelevant) seemed to understand how it would be received. He declined his bonus “because he feels close to the indie community,” said Mahon. But she’s accepting hers (£247,000 on top of fixed pay of £746,000) and Allan is taking his (£128,000 on top of £554,000) even though, you’d think, they have exactly the same reasons to feel aligned to the folk who make most of the programmes.
The fact of a big deficit at Channel 4 last year, one can agree, is irrelevant. There were three years of healthy surplus previously, and a not-for-profit corporation is meant to ride the ebbs and flows. And, up to point, it did cushion the blow for producers: overall spending on programmes was down by 7%, less than the 10% fall in revenues. But that’s cold comfort on the ground. The indies’ mood may not be improved by news that the “indefinitely” deferred retention bonuses (almost £400,000 in aggregate) weren’t deferred for long and were paid in July this year.
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None of which makes Channel 4 any less important in the UK broadcasting universe. Flogging it to a US broadcaster, the mostly likely form of privatisation, would have been a pointless and scandalous act of vandalism, as many of us argued at the time. In the round, the broadcaster fulfils its remit and serves the national interest – all at no cost to the public purse. But it also makes itself harder to love when it makes tin-eared decisions on bonuses.