Written evidence submitted by Channel
4
Channel 4 would like to make a brief written
submission addressing two of the issues raised by the Committee
in the oral evidence session on 12 May 2009.
DIGITAL CHANNELS
At Qq 50-58 there was discussion of the individual
profitability of Channel 4's digital channels E4, More4 and Film4.
Anne Bulford indicated that Channel 4 would be happy to provide
further information in confidence as these data are commercially
sensitive.
Channel 4's digital channels generate substantial
profits to be reinvested in public service content, and are a
vital part of Channel 4's strategy to address the structural financial
pressure caused by digital switchover. In total, Channel 4's digital
channels generated profits of £41 million in 2008—more
than double the profits of £16 million in 2007.
Table 1
OPERATING SURPLUS OF DIGITAL CHANNELS IN
2008 (£m)*
| | Total
|
| Revenues | 175 |
| Programme budget | (84) |
| Operating surplus | 41 |
| * Information for individual digital channels has been redacted.
|
| |
At Q55, in reference to the balance sheets of the digital
channels, Paul Farrelly MP quoted liabilities of £92.2 million
and assets of £23.0 million in 2007. Anne Bulford indicated
that these liabilities reflected monies owed back to Channel 4
in relation to the channels' share of transmission and other costs.
Channel 4 would like to note that in 2008, liabilities have reduced
to £58.8 million and assets have increased slightly
to £23.9 million. This is due to the improved profitability
of the channels as digital switchover progresses—Channel
4 expects the liabilities of the digital channels to continue
to fall in 2009.
REMUNERATION
At Qq 62-63, John Whittingdale MP asked about the proportion
of Channel 4 staff earning over £100,000 a year.
In response, Andy Duncan highlighted that Channel 4 operates
in a commercial marketplace and carefully benchmarks its staff
remuneration against its commercial competitors, such as Sky and
ITV. In addition, he noted that Channel 4 had implemented a pay
freeze for the whole of this year and added that senior staff
did not take any sort of bonus for 2008. Andy Duncan estimated
that the proportion was around 10%, and indicated that Channel
4 would be able to provide the exact figures later in writing.
Channel 4 can confirm that 78 employees are paid over £100,000
per year. This equates to just under 10% of a total 785 actual
employees, including the 55 Channel 4 employees that
are part of the Box Television joint venture with the Bauer Group.
Channel 4 hopes this information will be of assistance to
the Committee.
June 2009
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