Friday, October 30, 2009

BBC to Cut Pay, Jobs

The Wall Street Journal LONDON - Under pressure over its pay practices, British Broadcasting Corp. plans to cut the salaries of top managers and axe more than 100 senior posts as part of a broader overhaul to cut costs.

The BBC, which is funded by a license fee paid by the public, plans to cut the amount it spends on the salaries of its top bosses by about 25%, according to the BBC Trust.

The BBC Trust oversees the use of the license fee and had asked management to cut salaries as part of a review into ways to save money. The BBC currently spends about £79 million ($129.4 million) on pay for its 634 senior managers and nine most senior executives.

The BBC also expects to abolish 18% of senior management posts in that time. And, the current pay freeze and bonus suspension for top management will also be extended.

The moves come as the BBC is facing tough questions about its funding and spending practices. The BBC -- known around the world for its journalism, quirky comedies and period dramas -- is a media behemoth in its own market. About two-thirds of all shows made by U.K. television networks are BBC productions, while 56% of all U.K. radio shows are made by the BBC and the most-read news Web site in the U.K. is, according to government figures.

The BBC receives £3.4 billion annually from a £142.50 tax -- known as the TV license fee -- on everyone who owns a TV in the U.K. Commercial rivals complain that gives the BBC an unfair advantage in dominating the radio, TV airwaves and Internet. As a result, the BBC is under pressure to share its publicly funded wealth with rivals.

The BBC's director general Mark Thompson, who is among those who will be affected by the pay cuts, said in a statement as part of the BBC Trust announcement that he and other senior managers "need to recognize that we are in a different economic climate." He said that "senior managers will see their total remuneration fall over the period, with the biggest reductions felt by those in the most senior positions."

Earlier this year, the BBC said it planned to reduce the amount it pays its top on-air talent following widespread public criticism about the talents' compensation.

Write to Cassell Bryan-Low at

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