Channel 4 Shows First Loss In A Decade

Channel 4 is to report its first financial loss in almost ten years after the economic downturn caused advertising revenues at the channel to fall by more than £35m during 2001.

Channel 4’s managing director, David Scott, told a parliamentary select committee yesterday that the channel would not be making a contribution to the Treasury “as there was no profit.” Channel 4 saw advertising revenues fall from £638m to around £600m last year and according to a company spokesman this has had an effect on cashflow.

The spokesman said: “We are a commercial broadcaster and like other commercial broadcasters we are feeling the effects of the difficult economic climate. The industry as a whole has seen ad revenue fall by 10% – so with a loss of 5% Channel 4 is performing robustly against its competitors.”

This 5% fall in advertising revenues will affect the channel’s programming budget for 2002, which is expected to be between 2% and 3% lower than the budget for 2001. Channel 4 has also been feeling the pinch in other areas of its business and after announcing 30 cost cutting redundancies at the end of last year reduced its investment in its commercial arm, 4 Ventures, by 50% (see Ad Downturn Claims Jobs At Channel 4).

Earlier in the week Channel 5 announced that advertising revenues for 2001 were down 7.5% year on year to £191.8m. However, the channel also confirmed that its programming budget for 2002 will be increased by around £5m to £149m (see Channel 5 Programming Budget Increased).

Channel 4: 020 7396 4444 www.channel4.com

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