A view of BBC Broadcasting House in London, U.K.
Rasid Necati Aslim | Anadolu | Getty Images
Hello and welcome to CNBC U.K. Exchange.
This week, I take a look at the challenges faced by former Google executive Matt Brittin as he prepares to take charge at the BBC, one of the U.K’s most enduring cultural exports and a crucial part of its media and communications landscape.
The BBC is cherished by most Britons — and loathed by a sizeable minority of them — but is buffeted by all sides as it enters negotiations with the government about its funding model and governance. Those negotiations are, in turn, being influenced by developments elsewhere around the world.
The dispatch
Director-general of the BBC is, along with England football manager, one of the toughest jobs in British public life.
It involves managing a vast creative organization, under intense public and political scrutiny, while simultaneously being editor-in-chief of one of the world’s most respected news outlets and taking responsibility for any mistakes.
That would be hard enough in normal times. But Matt Brittin, who was last week appointed the BBC’s 18th director-general in 104 years, has a more daunting in-tray than predecessors.
Brittin, a former international rower and previously Google’s president in Europe, the Middle East and Africa, arrives as the BBC battles a $10 billion defamation claim from U.S. President Donald Trump.
The suit alleges that a Panorama documentary (made by an independent production company) spliced together two extracts from a speech by the president on Jan. 6 2021, to imply he incited violence at Washington’s Capitol.
The BBC wants the case, filed in Florida, dismissed and says that because the documentary was not broadcast in the U.S., it did not harm Trump’s re-election chances. As things stand, though, it will come to court next year.
The Trump documentary claimed not only the job of Brittin’s predecessor, Tim Davie, but also that of Deborah Turness, the corporation’s head of news, who resigned alongside him. Appointing her successor is an immediate priority.
Funding negotiations
On top of that, Brittin must negotiate with ministers over the renewal of the royal charter under which the BBC operates. This comes up for renewal every decade, and the current one expires at the end of 2027. The government would like to scrap the renewal process and award the BBC a permanent charter, to provide more certainty, but these negotiations will bring with them awkward questions about its funding model.
The corporation is presently financed by a TV licence (rising to £180 ($238) in April) paid for by households, but this is seen as increasingly anachronistic when fewer people are consuming the BBC’s output — especially younger Britons — and more are watching platforms like Netflix or, indeed, YouTube (owned by Brittin’s former employer).
At the same time, fewer people are paying the licence fee, which has forced the BBC to reduce costs by hundreds of millions of pounds in recent years. The latest of these cuts, which emerged a few days ago, will see the award-winning team at BBC Studios Events, responsible for live coverage of events like royal weddings, dismantled.
Replacing the TV licence with a household broadcasting levy, like Germany’s Rundfunkbeitrag, is one possibility.
Adding complexity to the negotiations is that in the next decade, the U.K. will probably switch off its TV transmitters, at which point the BBC will become, in effect, just another online streamer.
Brittin’s tech background is seen as a major benefit amid this tough competitive landscape, but the BBC’s failure to disclose how many shares he owns in Google’s parent, Alphabet, has raised concerns about a potential conflict of interest.
Brittin’s lack of journalistic experience has also been criticized, even though several previous directors-general lacked such a background, most notably John Reith, the first and, some say, best.
Ironically, many of the criticisms aimed at Brittin were also levelled at Michelle Guthrie, another former Google executive, when in 2016 she became managing director of the Australian Broadcasting Corporation, Australia’s principal public service broadcaster. She was sacked two years later amid a row over her management style and relationship with the government.
Expect Brittin, a skilled manager and consummate communicator well-versed in dealing with politicians, to fare better. He could well be the BBC’s best hope of negotiating this treacherous new media landscape.
— Ian King
Need to know
Microsoft hit with UK competition regulator probe over software business. The U.K.’s Competition and Markets Authority had “concerns around Microsoft’s licensing practices in cloud,” CEO Sarah Cardell said.
The Iran war is sparing no major economy, but one could be hit harder than others. The U.K. is considered to be more exposed to the global energy price shock than many other nations.
British Airways to reward pilots for cutting fuel as airlines tackle higher costs. The airline is looking to incentivize its pilots with bonuses to cut down on their aircraft’s fuel consumption from next year.
— Holly Ellyatt
Coming Up
APR 7: UK new car sales data for March
APR 8: Halifax house price index for March
APR 14: BRC retail sales monitor for March
