As the BBC faces its biggest overhaul since the 2006 Creative Future review, Katherine Rushton examines executive reaction to the shake-up and what the changes will mean for the corporation.

Strictly Come Dancing

As often seems to happen in broadcasting politics, last week saw the gentle ushering in of a potentially seismic change. The news, that the BBC is to review its “size and scope”, emerged in a curious double-whammy of official missives: one from director general Mark Thompson to BBC staff, and the other from the BBC Trust chairman, Sir Michael Lyons, addressed “Dear licence fee payer”.

At first glance, both seemed to rally support for the corporation. Thompson claimed James Murdoch and other detractors are “out of touch” with public opinion, and Lyons asserted the Trust’s authority over the licence fee, with the unsurprising news that the public would prefer surplus cash returned to their pockets over any top-slicing alternative.

But coupled with these morale and support-boosting communiqués was a far more significant message: a tacit admission that the BBC’s detractors could be onto something and that, perhaps, the corporation might just have got too big.

Lyons phrased it: “We want to consider whether the BBC is the right size and is operating within the right boundaries… We want a BBC that is smarter, more efficient and no bigger than it needs to be.” Hardly the boldest of statements, but BBC and Trust sources were quick to brief the press that the review is a “blank canvas” with nothing “ruled in or out”. Anyone who has watched the storm of criticism whipping up around the BBC over the past 18 months will know there is only one acceptable direction of travel: the corporation is set to shrink.

The question now is where and by how much. One very senior executive suggested to Broadcast that the corporation should cut its budget back by as much as a quarter - £800m - and be unafraid to kill a few “sacred cows” in the process. “How many orchestras does the BBC need? At the moment it has five,” the source said.

THE INDUSTRY VIEW ON…

  • Cutting back the BBC

Senior BBC exec “The BBC should have done this a year ago, not now, when it looks like we’re just responding to Murdoch. We should be cutting £800m from the budget, and to do that we have to be prepared to sacrifice some sacred cows.”

Kenton Allen, chief executive, Big Talk Productions “I would get out of US movie and television acquisitions and invest that spend in original UK content. I don’t honestly think it’s a case of cutting back services, more a case of regulating who has access to them.”

BBC controller “I don’t know what you would cut. We shouldn’t be pulling back from ways of reaching audiences.”

  • Capping executive pay

David Frank, RDF Media chief executive “The only talented people who will accept key jobs there will be those who can ‘afford’ to work for the BBC - people who have either made or inherited a lot of money. Are these the sort of people we want deciding what ends up on our screen?”

Former BBC director
“Would Mark Thompson have applied to be DG if the pay was £200k a year? I expect so. Would Fincham join C4 if it paid £200k a year? I expect so. These jobs are just too interesting to turn down.”

Other insiders are significantly more cautious, but almost everyone in the upper ranks of the corporation is bracing themselves for a major overhaul, on at least the scale of the 2006 Creative Future review, with whole services likely to be axed. If and when it does so, it will be the first time the BBC has voluntarily withdrawn from a market it once saw fit to enter.

The only service that’s definitely safe is free online news provision - Murdoch’s bête-noire, but a “non-negotiable” for Thompson, and a surefire vote winner among licence-fee payers.

Instead, Thompson has indicated that BBC Worldwide could hold the answers. The commercial operation - which is still in talks with Channel 4 over a possible joint venture - could be floated or even part-privatised, potentially by handing a chunk to a rival broadcaster. It also seems likely it will be forced to shed Lonely Planet, the travel publisher in which it acquired a majority stake in 2007 and which has since become a totem of the corporation overstepping its remit.

Speculation over other potential victims of the review has centred on the BBC’s US acquisitions, including Mad Men and The Wire, which do a lot for the corporation in terms of cachet, but only attract modest ratings and would no doubt find their way to British viewers via another route.

However, significant as these changes are, they will not be enough to hush the critics. For the BBC’s more politically minded executives, more drastic action is required - putting one or more of the digital radio stations and the digital television channels in the firing line.

Historically, BBC3 has been the most vulnerable target, but recently it has felt like the tide of criticism has turned. Thompson and Lyons frequently name it as one of the key places to grow new talent and experiment with difficult genres such as comedy - particularly important given its struggle on BBC1. The channel also plays a significant part in reaching out to young people, on whom the BBC’s survival depends.

It is also easy to make a case for protecting BBC4, which delivers a good chunk of the corporation’s unequivocal public service content. However, the Trust has been pushing for the channel to work more closely with BBC2, which is the ultimate home of many BBC4 programmes in any case, and a number of staff expect the two services to be merged. “The current management are almost bound to destroy BBC4,” said a senior figure in specialist factual. “I can’t see how the review won’t be a disaster for [BBC4 controller] Richard Klein and [docs strand] Storyville. If the BBC shrinks, it will shrink the wrong way.”

However, a few senior figures suggest all the channels could survive intact. “Internally, the view is that they’re doing good jobs and that the criticism is often from people who don’t know what the channels are there to do,” said one controller. A senior production figure added: “I think the BBC will just fudge it.”

Perhaps the real battleground will be entertainment. According to sources, some senior politicians have indicated to the BBC that they want it to move away from light entertainment, arguing that this is the kind of programme the market will provide, and which perpetuates problems around the kind of money the BBC is willing to pay some stars.

However, to many rank-and-file staff, discussion about what the review will scrap or preserve still seems abstract and distant. “Most people are confused - but probably because Mark Thompson and Michael Lyons are sending out conflicting signals. There have been so many reviews that people are quite cynical about them,” said a BBC News insider. “[The rank-and-file] are talking about what might go, but only in the loosest sense. That may be because they don’t know what is about to hit them.”

The source speculated that things were very different among “the boss class”, and while most controllers and directors Broadcast spoke to are clearly engaged in the review, many are even more interested in the debate about executive pay.

The Tory policy to cap BBC executive salaries at the same level as the prime minister’s pay (£192,250 versus Thompson’s £834,000) might feel unrealistic at the moment, but the notion of a signifi cant reduction is fast gaining traction. The rationale - that the BBC does not need to match market rates because staff will flock to it for the “kudos” of working there - makes sense for individuals who have forged their careers in broadcasting and could not ask for a more prestigious or varied place to work. Comedian Paul Merton puts it nicely: “The BBC is like a Great Dane that doesn’t realise it’s the biggest dog in the room.” It is much tougher to argue the kudos case for finance or future technology chiefs, however. As Thompson puts it: “The public will not get things such as the iPlayer if some artificial lens is used that says people in the BBC are just like people who work in local councils.”

But, be that as it may, the corporation may have to give some ground on this front. To the outside world, it looks like the BBC has already been back-footed by Murdoch. It needs to get in there on exec salaries before either he or the Tories go further - and avoid another case of the tail wagging the Great Dane.

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