Yahoo News Channel 4 Chiefs Set For 20% Pay Cut As UK Broadcaster Eyes $92M Emergency Credit Facility
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Channel 4’s top executives, including CEO Alex Mahon, are set to join other entertainment industry chiefs in taking a coronavirus pay cut as the advertising downturn begins to bite.
The Gogglebox and Great British Bake Off broadcaster, which is almost entirely funded by the ad market, is preparing to announce a range of cost-cutting measures this week, which will include salary reductions for senior managers and the company’s board.
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It follows ITV slashing executive pay last week and Sky CEO Jeremy Darroch donating nine months of his 2020 salary to coronavirus relief charities — although Channel 4 is said to have agreed salary cuts prior to these announcements being made by its peers last week.
Channel 4’s cost-cutting plan has emerged as the broadcaster is engaged in talks with the government over accessing its £75M ($92M) emergency credit facility, which is in place in case if its £180M cash reserves run dry.
The credit facility was arranged in 2018 and is there as a support mechanism in unprecedented circumstances. Sources have told Deadline that Channel 4’s relocation costs have left it particularly exposed to an advertising downturn. The move to Leeds and other parts of the UK is costing at least £50M.
Channel 4 is expected to provide an update on the credit facility, which it needs government permission to access, and the severity of the advertising collapse when it outlines its cost-cutting measures later this week.
In an awkward bit of timing for Channel 4, the broadcaster paid out millions in bonuses to staff in February on the back of its performance in 2019, when it managed to grow its share of viewing in the UK. Mahon and director of programs Ian Katz were among those to have received bonuses.
A Channel 4 spokesman said: “Channel 4’s variable pay award for 2019 was agreed by the Board in January, reflecting the strong progress made last year against corporate objectives. The award was communicated to all staff in January and was committed through the payroll system in February.”
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