With the publication of the BBC Annual Report and Accounts, much media attention was concentrated on the discrepancy on pay between men and women among its on air talent. Equally revealing are the sums paid to senior executives. The real issue with BBC finances is not how much it pays to a few of its top performers, but its ability to compete in an increasingly competitive commercial market.
The BBC disclosed fewer than a hundred performers and presenters earning over £150,000, despite many being household names. There are a further 136 earning between £100,000 and £150,000. Over 1,200 earn between £40,000 and £100,000 and there are over 40,000 contracts for less than £40,000. The total spend on ‘talent’ is only £194 million a year, out of an annual budget of approaching £5 billion.
While there are countless underpaid individuals that work tirelessly for the BBC, there are still tiers of management above them.
There are around a hundred senior executives earning over £150,000. That might seem justifiable for those in important editorial roles, but there are also a number of technical functions commanding such sums, including project managers and programme managers, and apparently an ‘Identity Architect’ who earns more than the Prime Minister, or the political editor of the BBC.
Lord Hall, the director general, who on £450,000 a year receives less than newsreader Huw Edwards, argues that those at the top of the organisation are paid less than half of what their commercial rivals receive. He says “It is our aim to pay senior managers less than the market rate”.
The number of senior managers has been reduced from over 500 in 2010 to just over 300 at the end of 2016. Perhaps the corporation would be better off paying more to fewer managers. There is an old joke about how many people work at the BBC — about half. The actual number is over 21,000, of which around 9% work for commercial subsidiaries.
BBC Worldwide, the commercial arm of the corporation, brought in revenues of £876 million. However, the total operating costs of the commercial arm were £875 million. Together with its share of results from joint ventures it produced an operating profit of £49 million and paid dividends to BBC of less than £90 million.
BBC Worldwide has benefited from licensing programmes to Netflix and Amazon, with which it also has co-production deals. However, its ability to invest is dwarfed by their spending on original productions.
Netflix alone is planning to spend $6 billion on programming in 2017, which is more than the entire budget of the BBC.
Attempts by BBC Worldwide to go direct to consumer have had mixed results. It withdrew its global BBC iPlayer after failing to launch in the United States. Its BritBox joint venture with ITV has been overshadowed by other subscription video services. BBC Store, which offered programmes for sale, ended up closing due to lack of demand, offering customers a full refund on any purchases and writing off £12 million.
On total sales of £146 million in consumer products, BBC Worldwide only made headline profits of £4 million.
Nevertheless, the chief executive of BBC Worldwide received total remuneration of over £680,000, which is considerably more than the highest paid woman presenter on the BBC.