Today the Government announced that it is forcing the BBC to make public the salaries of its on-air talent who earn more than £150,000.
Culture Secretary Karen Bradley confirmed the widely-trailed reports that the new BBC Charter would force the organisation to reveal how much it pays to over 100 of its stars.
The BBC had previously agreed that earnings more than £450,000 would be made public in a deal struck with former Culture Secretary John Whittingdale. But Bradley has renegotiated these terms, as made public in the draft Charter published today.
The Government says the move will make the BBC “more open and transparent about its operations while making sure the public broadcaster continues to thrive in the future.”
Speaking today, Bradley said: “Licence fee payers have a right to know where their money goes. By making the BBC more transparent it will help deliver savings that can then be invested in even more great programmes.”
But many disagree fundamentally with this claim, and the proposals have been widely attacked by the BBC and – in a rare show of unity – their commercial rivals.
Here’s our guide to the issues and what they could mean for licence-fee payers…
When will it happen?
The new Charter decides the size and scope of the BBC for the next 11 years and agreed terms include the size of the licence fee – currently £145.50 – which will now rise in line with inflation (the fee was frozen under the last Charter). The new Charter comes into force at the start of 2017. The BBC is expected to make the salaries of presenters earning more than £150,000 public by next summer.
Whose salaries are likely to be disclosed?
The BBC already publishes the salaries of its top executives – the new rules cover on-air talent. The BBC’s latest annual report revealed that those earning between £500,000 and £5 million annually fell from nine to seven last year. These are likely to include Gary Lineker, Chris Evans and Graham Norton, whose pay was therefore already due to be revealed under the terms agreed between the BBC and John Whittingdale.
However, the new limit of £150,000 means high profile news presenters such as John Humphrys and Nick Robinson will almost certainly have their pay disclosed too, as will reporters like Laura Kuenssberg and Kirsty Wark, TV and radio hosts such as Fiona Bruce and Jeremy Vine, as well as the likes of Strictly Come Dancing presenters Tess Daly and Claudia Winkleman. In all, 109 TV and radio presenters earn more than £150,000 according to the latest BBC annual report.
Why is it so controversial?
For one, the BBC thought it had agreed terms with Whittingdale and former Prime Minister David Cameron that only those earning more than £450,000 would be made public – a very small number of people on the Corporation’s pay roll. But Theresa May, the new Prime Minister, and Karen Bradley, the new Culture Secretary, have chosen to reduce the threshold.
What’s more, the BBC believes the stipulations represent a “poachers’ charter” because it would give rivals a clear idea of how to woo some of their best-known names at a time when competition in TV is intensifying. The BBC is in agreement with commercial broadcasters on this as they all believe this will effectively push up the wage bill for everyone. Talent agents negotiating deals will be able to cite the salaries of rival presenters and increase their demands across the board, it is feared, making all broadcasters less capable of defending salary caps or restrictions.
BBC director of content Charlotte Moore summed the argument up at the Edinburgh Television Festival recently: “The outcome could well be that talent fees will go up because if everybody knows what everybody is being paid they will go ‘I want to be paid that.’
“It’s not always up to the BBC what we pay someone. If they work for a production company I don’t know what the deal is. It’s a difficult, complex area. We know that our audience expects to have the best talent on BBC1. We also know we can’t pay as much as other broadcasters.”
What could this mean for licence-fee payers?
If wages go up, it means less value for licence fee payers, and if the BBC loses its top talent, again, viewers will suffer.
The BBC’s director general Tony Hall today reiterated that belief, saying: “Our position on talent pay has not changed and all major broadcasters have questioned the merit of the proposal. The BBC is already incredibly transparent and we publish what we spend on talent pay – a bill which has fallen in recent years. The BBC operates in a competitive market and this will not make it easier for the BBC to retain the talent the public love. Ultimately, the BBC should be judged on the quality of its programmes.”
The BBC Trust, which represents the interests of licence-fee payers, is vehemently opposed to the move too. Outgoing Trust chair Rona Fairhead said: “We don’t agree with the Government on everything and are disappointed with the decision on the disclosure of presenters’ pay. We don’t believe this is in the long-term interests of licence fee payers.”
Are other broadcasters worried?
Yes. They don’t think it is a good idea. ITV, Channel 4, and Chanel 5 all agree that if the BBC’s salaries are known, then it will push up the talent bill for everyone. “If agents know what the score is they are in a much better bargaining position with everyone,” said one source from the commercial sector. At the Edinburgh TV Festival last month ITV’s programmes chief Kevin Lygo called the proposal a “mean-spirited, nosey way of looking at things.”
“Where does it get you?” chipped in Channel 4’s chief creative officer Jay Hunt at the same panel session. “It puts the BBC on the backfoot in a way that’s unhelpful for licence fee payers.” Ben Frow, the director of programmes at Channel 5, added: “I pay my licence fee and I trust that the people at the BBC spend my money in the best way they see fit to give me the content that will most reward me. I don’t need to know who earns this and who earns that.”
Will there be ways around this?
In some cases. Actors and on-air talent paid for by the BBC’s commercial arm BBC Worldwide or under co-production deals could still avoid the disclosure rules. Also, presenters who are employed – and paid – directly by an independent production company making their show will in theory be exempt. Many industry insiders believe that a number of existing talent contracts will be renegotiated now in a bid to step round the new rules. However BBC employees directly paid by the BBC will have considerable difficulty trying to do this.