BBC Says “Transformational” Savings, Growth Plans to Return It to Surplus After 2024/2025 Deficit

The BBC will look to further cost cuts, growth initiatives and transformation to help it fund its operations and public duties amid financial and sector challenges and return it to a financial surplus after a deficit that will balloon in the new fiscal year, the U.K. public broadcaster said in its annual plan and annual report Thursday.

Led by Director General Tim Davie, the broadcaster in its annual report outlined priorities for the new fiscal year 2024/2025 starting in April. “Our financial plan includes a transformative approach to savings to enable delivery of our strategic ambitions,” it said. “This will require a number of difficult decisions over the course of the year, including one-off transformational costs. Ultimately savings will help to deliver reinvestment in our audience offering and set the BBC up to succeed as audience consumption patterns change.”

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For the fiscal year, the license fee for U.K. taxpayers will remain the single largest source of income
for the BBC. But it predicts a 492 million pound ($620 million) loss for the year, a widening of the loss by around 40 percent from the most recent year. “The growth of the commercial group drives higher income. It also requires significant investment in ’24/’25, contributing to the group operating deficit,” the annual plan explained. “As usual at this point in the cycle, this year also sees one-off public service content spend on major sporting events, including the Summer Olympics and men’s Euros.”

The annual deficit will be “funded by cash reserves established in previous years in anticipation of exceptional increased spend.”

In future years, the BBC expects to return to a positive bottom line. “Following the transformational budget in ’24/’25, our financial plan is projected to return to a…surplus from ’25/’26 as new savings programs are established and commercial growth is established,” it said. “Transformational savings plans will incur one-off costs in ’24/’25 as we navigate through this period of change.”

It didn’t immediately detail new cost plans, but Davie earlier this week said that his team would target around 200 million pounds ($253 million) in annual savings over the coming years.

The BBC needs more partnerships with media, entertainment and technology giants, such as one with the Walt Disney Co. for sci-fi hit show Doctor Who, and has to change how it does business in a competitive and polarized world, Davie said in a big recent speech that highlighted three top priorities for the broadcaster: pursuing truth, backing British storytelling and uniting people. The proactive, but considered, use of AI and “ethical algorithms” is also part of his plans for the BBC.

On Thursday, the BBC said it will fulfill its three core roles in various ways over the next year. Those include: “unparalleled coverage of elections in the U.K. and around the world, where pursuing truth and countering disinformation will be critical” (this includes the local elections in England in May, the U.S. presidential election in November and the anticipated U.K. general election later this year); “a wide range of dramas and comedies from across the U.K., including the return of Blue Lights in Northern Ireland, the Scottish drama Granite Harbour, and new comedies Dinosaur and Mammoth, the Welsh drama Lost Boys and Fairies, and the return of Doctor Who“; and “an unmissable summer of sport to bring people together with the men’s European (soccer) championship, Wimbledon, The Hundred and the Summer Olympic Games in Paris.”

The annual plan also confirmed the goal for commercial arm BBC Studios to double its 2021/2022 commercial revenue by 2027/2028.

“This is going to be a significant year for the BBC,” Davie said. “Our content offer is packed with major sporting and music events, exciting new dramas and unrivaled coverage of elections across the world. It will also be a year of embracing reform and innovation as we deliver value for all, focused on pursuing truth with no agenda, backing the best of British storytelling, and bringing people together.”

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