Channel 4, the impoverished publicly owned broadcaster at the heart of a debate over the future of UK television, said on Monday it had frozen salaries for all staff and its two most senior staff members were waiving their performance bonuses for 2008.
The decision came as the television industry got down to what one person familiar with the discussions called “the gruntwork” of figuring out how to fill a funding gap of up to £100m that is forecast to emerge in C4’s finances by 2012.
Putting the programming core of C4 together with elements of BBC Worldwide, the commercial arm of the BBC, is the government’s preferred option, at least in the early stages, but it emerged on Monday that the financial benefits of that arrangement were likely to fall short of the target.
That could lead to other commercial operators, including Five, which is owned by the European broadcaster RTL, becoming involved in a new operator.
The Financial Times has been told by people familiar with the discussions that there is at least one, and possibly two other businesses that have expressed an interest in joining forces in a “PSB 2”.
It would be a public-service broadcaster centred on C4 which would have the financial and creative heft to provide an alternative to the BBC as a creator of programmes of cultural or social benefit.
The industry has until March 12 to tell Lord Carter, the communications minister who is heading the government drive to stabilise the PSB framework.
The government is satisfied that the managements of all the main players, including the directors of RTL, now accept that something needs to be done that will demand the sacrifice of entrenched positions, according to people who have been party to the discussions.
But negotiations to decide the financial and managerial structure of PSB 2 are expected to be fraught with tensions, not least on the thorny question of what bankers call “social issues”, or which high-level executives could find their services superfluous in the new organisation.
C4 said on Monday it told staff late last year that it was freezing all salaries at 2009 levels. The company added that Andy Duncan, the chief executive, and Kevin Lygo, the director of television, had indicated that they would not be taking their bonuses for 2008, worth up to 30 per cent of their salaries.
2 Feb 2009 6:46pm
By Ben Fenton, Chief Media Correspondent
Source: Financial Times