Fears for future of Channel 4 over its ‘biblical’ cash crisis
THE future of Channel 4 is under threat as it faces financial meltdown following a sharp decline in advertising revenue.
With the network suffering from a lack of big hits and must-see returning series, industry sources say there is little chance of new quality shows being made this year.
It comes after the channel’s programming budget was cut by £150million, with less than £10million to spend until the end of 2020 and advertising sales falling by as much as 65 per cent this month.
Channel 4, which is state-owned, has been forced to discuss dipping into a new £75million Government emergency fund in a desperate bid to stave off collapse.
A spokesman last night said station chiefs had introduced ‘a range of measures to manage our costs appropriately’.
But one broadcasting industry insider warned: ‘Channel 4 has got a serious fight on its hands to keep going in its current form.
‘There are fears that it will no longer be able to make the sort of ground-breaking hit shows that it needs to be delivering. In short, the outlook is very bleak indeed.’
The Mail on Sunday understands that production companies have been told by senior executives that budgets have been dramatically cut so their content will have to be bought at a far cheaper rate.
Because it doesn’t make its own shows which can be sold on to other networks, Channel 4’s only revenue stream is advertising. Its most popular programmes, including The Great British Bake Off, Gogglebox and First Dates, are all produced by independent businesses.
Concerns were raised about the network’s future yesterday on industry website Broadcast.
One person pointed the finger of blame at programming chief Ian Katz, a former editor of Newsnight, and chief executive Alex Mahon, saying: ‘This is biblical. They have spent two years pretending and in denial. This pandemic no longer means they can hide their heads in the sand.
‘But Mahon and Katz won’t lose their houses, and they won’t suffer the loss that those of us who grew up inspired by that channel and worked so hard to make some of the greatest programmes will.’
Earlier this month, the station took its new lunchtime programme, The Steph Show, off air. According to Mr Katz, neighbours of presenter Steph McGovern – who was fronting the programme from her home – had complained.
Although it ended up drawing just 230,000 viewers, Channel 4 had previously claimed the show was the ‘best antidote’ to the coronavirus doom and gloom.
A spokesman for Channel 4, which has furloughed 120 staff since
March, said: ‘Channel 4 has demonstrated the importance of its public service role by helping audiences navigate through the Covid-19 crisis.
‘We’ve reached record audiences through lockdown, particularly young viewers, with our news, factual and entertainment programming, delivered important public health messages to hard-to-reach audiences, and the latest Ofcom data shows Channel 4 as the most trusted national news source of information about coronavirus.’
The spokesman added: ‘Like many commercially funded businesses this pandemic has had an impact on our advertising revenues and we announced in April a range of measures to manage our costs appropriately, protect our ability to invest in distinctive and challenging content and continue to create jobs and opportunities in the creative sector across the UK.’