View of BBC Broadcasting House in London, UK
Rashid Nekati Aslim | Anadolu | Getty Images
Hello. Welcome to CNBC UK Exchange.
This week we look at the challenges facing former Google executive Matt Brittin as he prepares to take the helm of the BBC, one of Britain’s most enduring cultural exports and a vital part of media and communications.
The BBC, cherished by most Brits and loathed by a significant minority, has faced pushback from all sides as it enters negotiations with the government over its funding model and governance. These negotiations, in turn, will be influenced by developments in other parts of the world.
dispatch
The Director-General of the BBC has one of the toughest jobs in British public life, along with being England Football Manager.
This requires managing a huge creative organization under intense public and political scrutiny, while also taking responsibility for every mistake as editor-in-chief of one of the world’s most respected news organizations.
That would be difficult enough in peacetime. But Matt Brittin, who was appointed last week as the BBC’s 18th director general in 104 years, faces an even tougher challenge than his predecessor.
Mr Bulletin, a former international rower and previously head of Google in Europe, the Middle East and Africa, arrives as the BBC fights a $10 billion defamation lawsuit from US President Donald Trump.
The complaint alleges that the Panorama documentary (produced by an independent production company) splices together two excerpts from the president’s speech on January 6, 2021, suggesting that the president incited violence at the Capitol in Washington.
The BBC is seeking to dismiss the Florida lawsuit, arguing that because the documentary was not broadcast in the United States, it had no negative impact on President Trump’s re-election chances. However, if things continue as they are, the case will go to court next year.
Mr. Trump’s documentary claimed not only the job of Mr. Bulletin’s predecessor, Tim Davie, but also that of the company’s news director, Deborah Turness, who resigned along with Mr. Bulletin. Appointing her successor is the immediate priority.
financing negotiations
In addition, the Bulletin will have to negotiate with ministers about updating the Royal Charter, which is run by the BBC. The scheme is renewed every 10 years, with the current scheme expiring at the end of 2027. The government wants to scrap the renewal process and give the BBC a permanent license to provide more certainty, but such negotiations would raise thorny questions about the funding model.
The company is currently funded by TV license fees paid by households, which rose to £180 ($238) in April, but this is increasingly seen as an anachronism as fewer people, especially younger Britons, watch BBC programming and more watch it on platforms such as Netflix and, indeed, YouTube (owned by Ms Bulletin’s former employer).
At the same time, fewer people are paying license fees, forcing the BBC to cut costs by hundreds of millions of pounds in recent years. These latest cuts, released a few days ago, will see the dismantling of BBC Studio Events’ award-winning team responsible for live coverage of events such as royal weddings.
One possibility is to replace TV licenses with a home broadcasting tax, as in Germany’s Rundfunkbeitrag.
Further complicating negotiations, the UK is likely to shut down its television transmitters within the next decade, at which point the BBC will effectively become just another online broadcaster.
Mr Bulletin’s technology background is seen as a big advantage in this competitive environment, but the BBC’s failure to disclose how many shares he owns in Google’s parent company Alphabet has raised concerns about a potential conflict of interest.
Mr Bulletin’s lack of journalistic experience has also been criticized, although some previous Director-Generals did not have such a background, most notably the first and greatest, John Rees.
Ironically, much of the criticism leveled at the Bulletin was also leveled at Michelle Guthrie, another former Google executive who became managing director of Australia’s main public broadcaster, the Australian Broadcasting Corporation, in 2016. She was fired two years later amid controversy over her management style and relationships with the government.
Mr. Brittin is a talented manager with impeccable communication skills and is well-versed in dealing with politicians.We look forward to seeing him succeed. He could be the BBC’s best bet in negotiating this treacherous new media landscape.
— Ian King
need to know
Microsoft has been investigated by the UK competition regulator over its software business. The UK’s Competition and Markets Authority was “concerned about Microsoft’s licensing practices in the cloud,” CEO Sarah Cardel said.
The Iran war is affecting major economies, but one may be hit harder than others. The UK is considered to be more exposed to global energy price shocks than many other countries.
British Airways will reward pilots who help save fuel as airlines grapple with rising costs. Starting next year, the company is considering giving pilots bonuses and incentives to reduce the fuel consumption of their aircraft.
— Holly Ellyatt
Coming soon
April 7: UK new car sales data for March
April 8: Halifax Home Price Index for March
April 14: March BRC Retail Sales Monitor
