Channel 4 Executive Pay Soars To Record Highs Amid “Very Challenging” Market Conditions
Channel 4 executive pay soared to record highs last year amid industry fury over salaries for senior leaders at the UK commercial broadcaster.
Bumper pay packets were expected for 2022, but Channel 4’s annual report lays bare how much its top team earned as they fought off privatization and delivered a stable commercial performance.
Channel 4’s fortunes have soured in recent months as an ad market downturn has forced it to cancel and delay shows, and significantly slow down new commissions.
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As Channel 4 commissions all of its content from independent producers, suppliers have been asked to suck up some of this pain, which has fuelled anger over executive salaries.
Alex Mahon’s total pay packet rose 25% to £1.5M ($2M) last year and was the most a Channel 4 Chief Executive has been paid in the company’s 40-year history.
Channel 4’s executive team received record variable pay of £1.1M last year after the broadcaster’s remuneration committee unlocked bigger performance-related bonuses.
Ian Katz, Channel 4’s Chief Content Officer, pocketed a total pay packet of £845,000. This was an increase of 36% on 2021 and was the most a creative leader at Channel 4 has been paid since 2008.
Mahon and Katz’s pay packets included a loyalty bonus for sticking with Channel 4 as the government attempted to sell the crown jewel of UK broadcasting.
They have deferred these bonuses indefinitely as they steer Channel 4 through “very challenging” market conditions this year. Channel 4 executives have also declined a pay rise.
Channel 4 Chairman Ian Cheshire said the record earnings were justified. He said salaries benchmark favorably against other UK media companies and there are clear targets for bonuses.
“Last year as we emerged from the pandemic, Channel 4 faced unprecedented challenges: privatisation, political instability and macroeconomic turbulence continuing into this year,” he said. “Channel 4’s exceptional team has steered the organisation to the benefit of British viewers and the creative industries.”
Cheshire added that Channel 4’s commercial performance in 2022 was “better than we originally feared.” Revenue was £1.14B last year, down 2% from 2021’s record of £1.16B.
Channel 4 said it spent £713M on programming in 2022, £570M of which was on original content. Both figures were at historic highs for the commercial broadcaster, which boasts hits including Gogglebox and The Great British Bake Off.
Mahon told media on Wednesday that a third of Channel 4 sales now come from sources other than traditional television advertising. Some 22% of the revenue was from digital ad sales.
Channel 4, which is publically owned but commercially funded, delivered a surplus of £20M last year. This was down from the 2021 surplus of £101M.
Mahon said: “With Channel 4’s financial sustainability and ownership status no longer in question, we are doubling down on what we were created for: to deliver the best and broadest range of programmes that truly reflect British lives; to engage young people with genuinely public service content; and to prioritise digital growth to be where the audience is.”
Jonathan Allan, Channel 4’s Chief Operating Officer, said ad revenue is expected to fall 6% this year, which he acknowledged was “not great.”
He added, however, that there are signs of recovery. Allan said the market has improved in June and July, and is expected to return to growth in the final three months of the year. He added that 2024 is looking “much better” as the economy improves and Channel 4 prepares for major events, including the U.S. election.
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