Outlook Improves For Channel 4 As Profits Triple
Channel 4 saw profits triple last year as its wide-ranging effort to reduce costs began to bear fruit despite the ongoing downturn in the television advertising market.
The terrestrial broadcaster is understood to have improved its performance after holding advertising revenues flat during 2003 and cutting non-programme costs to focus on its core business.
The channel is expected to have met its pre-tax profit target of £45 million in the twelve months to December, compared with just £16.5 million in 2002. The 4 Ventures digital and multimedia business is also expected to have significantly reduced its 2003 losses from £28 million in the previous year.
Closure costs at the Film Four production unit caused it to post a loss of £56 million in 2002. However, the business looks set to return to profit this year as the result of efforts to downsize it.
The figures will be detailed in full when Channel 4 publishes its annual report in April. They will make encouraging reading for the broadcaster’s new chairman, who is expected to be named by Culture Secretary, Tessa Jowell, later this week.
It is understood that former Coca-Cola executive, Penny Hughes, has been shortlisted for the role. However, other names linked to the £66,000 a year position include Orange founder Hans Snook, former Arcadia chief executive Stuart Rose and Guardian Media Group boss, Bob Phillis (see Channel 4 Ponders Hughes To Take Over Chairmanship).
Channel 4 has had a rough ride over the last couple of years and the ongoing advertising downturn has taken its toll on profits. In October 2002 the broadcaster announced details of the most radical restructure in its 20-year history, which included proposals for up to 200 job losses (see Channel 4 Announces Most Radical Restructure In 20 Years).
However, the return to profitability will help Channel 4 strengthen its programming budget, which currently stands at a record £450 million. This should help the broadcaster increase its share of viewing, which fell below the ten percent mark for the first time in over a decade during 2003 (see Channel 4 Sees Audience Share Dip During 2003).
Channel Four: 020 7396 4444 www.channel4.co.uk
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