Channel 4 Suffers First Operating Loss Since 1992

Channel 4’s core channel made an operating loss last year for the first time since 1992, with Channel 4 chairman Luke Johnson warning that the broadcaster has reached a “tipping point” in its funding shortfall.

The core channel recorded an operating loss of £7.8 million, with the group’s pre-tax profit falling from £21.3 million to £1.6 million.

The digital channels E4, More4 and Film4 all saw their audiences increase, although rating for the core channel fell 11% in 2007.

Group turnover was £944.9 million in 2007, up slightly on a record £937 million in 2006. Overall, Channel 4 group returned a pre-tax surplus of £1.6 million against a surplus of £21.3 million the previous year.

Johnson said: “2007 will be the last year in which Channel 4, under its current funding model, manages the difficult balance between increased creative investment and financial break-even.

“The tipping point we have been warning about has been reached, with the core channel now in deficit and being supported by profits from secondary activities.

“In response to market conditions, we are already having to cut editorial budgets and a new public funding solution is now urgently required if we are to maintain such impressive levels of public service plurality in competition with the BBC.”

Andy Duncan, Channel 4 chief executive, said: “Channel 4’s key objective each year is successful delivery of its public service remit, not maximising profit.

“In a difficult year for television, it was a significant achievement to be able to make our highest ever investment in award-winning UK content while still managing to break-even. We recorded the second highest annual share of viewing and the highest share of total TV advertising revenue in our history.”

In March, broadcaster announced that it is intending to move further into the digital media realm with an investment of £50 million in new format expansion as part of its future vision (see Channel 4 To Extend Digital Media Expansion).

Channel Four: 020 7396 4444 www.channel4.com