European Public Broadcasters' Crisis: After Abuse Scandal, BBC Set to Focus on Future Funding

11:18 AM PST 09/06/2013 by Georg Szalai

The U.K. TV giant -- now led by director Tony Hall, who has steadied the ship after months of chaos -- must negotiate a new charter by 2017.

LONDON ­-- The Jimmy Savile scandal, the departure of former director general George Entwistle after only 54 days and debate about excessive severance payments to departed top executives -- those are just some of the headaches that British public broadcaster BBC has had to deal with over the past year.

In November a bill to decriminalize the nonpayment of the BBC license fee that all taxpayers in Britain must pay annually -- whether they watch or listen to the BBC or not -- to help fund the broadcaster is scheduled to pass through the House of Commons. It is an indicator of the contentious nature of the way in which the BBC is funded.

While the BBC is more widely recognized around the world for its content than most other public broadcasters, the tumultuous times it has seen over the past year is something the BBC shares with its peers in such other big European countries as France, Germany, Italy and Spain.

The sexual abuse scandal surrounding late former BBC mainstay Savile has been unique to the company, and it led to management turnover late last year. But after internal probes and reviews of procedures, Tony Hall, who has been running the BBC as director general since April, is widely credited with having stabilized the ship.

He has also worked to address the more recent debate about severance payments to executives before his tenure that were found to have exceeded contractual guarantees. Hall's solution: cap severance, strictly review severance decisions and report on them every year -- all moves designed to bring more transparency and accountability to the public broadcaster, which critics have long said it has been lacking.

As a part of his review of the BBC's practices, Hall late last month promised to take a page out of Silicon Valley's playbook. Via a "bonfire of the boards," he hopes to speed up decisionmaking processes and make the company more creative.

"We need to be so much clearer on how we make decisions and who is accountable for them," Hall said. "We often spend far too long agonizing over decisions that other organizations have learned to make much more efficiently."

Hall also has made his picks for the executives overseeing the BBC's TV output, radio programming, news and business development. But the future of the BBC's budgets is the key long-term issue that Hall must address.

The way one of the world's biggest public service broadcasters is funded remains a source of jealousy for other TV networks here, both private and public. It contributed a whopping $5.55 billion (£3.65 billion) to BBC coffers in the fiscal year 2012-13 and certainly puts the public broadcaster in a powerful position.

The license fee ­runs $222 (£145.50) annually, but has been frozen at that level until 2017, a cut in real terms of around 16 percent in cash for the BBC's public services, the broadcaster has said. Before he exited his director general post at the BBC in 2012, Mark Thompson, now CEO of the New York Times Co., said his successor would be facing the risk of having to reduce services due to the funding shortfall.

Lorraine Heggessey, executive chairwoman of production firm Boom Pictures, last year defended the BBC license fee as a key funding source for the BBC, arguing it "is still the most efficient way."

But former BBC director general Greg Dyke has said that the unbundling of the taxpayer-financed BBC license fee from the inflation rate, which happened for the first time under Thompson, "could be a problem for the BBC." In several years, the broadcaster could end up with 20 percent to 30 percent less money to spend, he said. The BBC "should say the cuts are too big for the value it provides," he suggested. "It needs more fans out there fighting for it -- as long as it is as efficient as it can be."

Hall early in his tenure has focused on maximizing that efficiency. He is quietly and sure-footedly shaping the organization for the future while battling against any cuts that would dilute the quality of the content that attracts kudos and viewers. The hope internally is that he can prove the public broadcaster is still providing important news and entertainment services that are worth funding with the public's help well into the future.

One key date will come in 2017, when the BBC faces the renewal of­ its royal charter, for which it will enter into negotiations with the government well ahead of time. The charter is the constitutional underpinning of the BBC, its editorial independence and its public obligations.

Some politicians have signaled they could push for a new organizational setup for the BBC amid recent discontent with the BBC Trust, the broadcaster's governing body, which some say has too little power, while others feel it has at times gotten into the way of things.

Peter Bazalgette, the former chief creative officer of Big Brother producer Endemol, has said that the charter and funding are the most pressing concerns for the BBC. After all, it defines to the government, public and the wider TV community exactly what the BBC does and should do.

U.K. culture minister Ed Vaizey recently signaled that he doesn't feel the government needs to force major organizational or other changes at the BBC, but emphasized: "We do want to have an open debate about the future and issues to do with the BBC."

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