Channel 4’s flagship service increased its audience share for the first time in a decade last year, as a record year for revenues saw the broadcaster’s top brass receive almost maximum bonus payouts.
The publicly owned broadcaster, which appears to have successfully fought off an attempt at full privatisation by the government, increased its total revenues by more than 4% to a record £979m. Digital revenues grew 30% to £82m following the relaunch of its video-on-demand service as All 4.
Channel 4’s main channel, which in 2014 saw its audience share hit a 31-year low, bounced back to report its first increase in audience share since 2006.
Hit shows such as Gogglebox, and reality series Hunted and The Island with Bear Grylls, helped the main channel to a marginal audience share increase, from 5.87% to 5.92%. However, the broadcaster’s overall portfolio, including channels such as E4, Film4 and More4, saw its share of audience decline from 10.9% to 10.6%.
Nevertheless, the broadcaster’s performance was deemed good enough by its board to award almost maximum payouts for its top executives, 34% of a possible 40% of their salaries under its remuneration scheme. Channel 4’s top four executives, including chief executive, David Abraham, and creative chief, Jay Hunt, received £595,000 in bonus payouts.
Abraham received a total salary of £881,000 – almost double the £455,000 taken home by BBC director general, Tony Hall – including a £188,000 bonus and £138,000 in cash paid out in lieu of money put into a pension scheme. Hunt received a total of £612,000, including a bonus of £139,000 and cash in lieu of pension top-up, of £62,000.
Channel 4’s top four executives, who include sales chief, Jonathan Allan, and marketing and communications chief, Dan Brooke, took home £2.5m last year.
Because of Channel 4’s unique status its remuneration committee does not award bonuses on the metrics most other companies use, such as looking at factors including total shareholder returns. Instead bonuses – or variable pay – are linked to “creative achievement and financial sustainability”.
“We are doing all this in a climate of some uncertainty about the future of Channel 4, as the government considers options for our future,” said Abraham in a statement in the broadcaster’s annual report published on Tuesday. “Whatever the outcome of that process, the Channel 4 team and I remain focused on ensuring we run the organisation in a way that best delivers our remit and maintains our financial stability, building on all the success of 2015.”
The government is still looking at potential plans for Channel 4, including selling a minority stake, and potentially moving its London HQ to Birmingham or Manchester.
Channel 4 spent a record £629m on all programming and content last year, with£455m of that on original content. It made a post-tax surplus of £26m – it is a not-for-profit broadcaster – and said that £20m of that would be allocated to the “content reserve for future creative investment to protect the long-term delivery of our remit”.
The broadcaster said it has increased its total cash fund reserve by £30m to £252m. Channel 4 saw its total revenues from ad sales, including for third parties such as Dave and Gold owner, UKTV, and BT Sport, increased to £1.17bn.
