BBC Commercial Arms Cutting Costs By $170M Amid Coronavirus Pandemic

The BBC’s commercial arms are reducing their costs by £140M ($172M) over the next year after the coronavirus pandemic took a painful toll on revenue.

The BBC’s commercial units primarily comprise BBC Studios, BBC Global News, and studios business BBC Studioworks, with BBC Studios accounting for nearly 90% of their combined £1.34B of revenue last year.

In its annual plan, the BBC said production shutdowns and the “unprecedented” drop in global advertising has had a “significant impact” on income in 2020. As a result, “significant mitigating actions” are being taken to bring costs down.

A good chunk of this cost-cutting will be because BBC Studios is not spending as much on making shows during the lockdown, but other savings will be made by “reducing the cost base and reprioritising and phasing planned investments,” the BBC said in its annual plan.

A BBC Studios spokeswoman declined to comment on whether this will involve job cuts, or what was meant by reprioritizing investments. She said: “The mitigations principally reflect delays to cash outflow from productions being in lockdown, as well as deferrals and reductions in cash investment across in-year projects.”

BBC Studios had to pause production on 80 shows in March, including marques brands such as Top Gear and EastEnders. Both of these shows will begin shooting again in the coming weeks, while BBC Studios is also hopeful that Doctor Who can be filmed over the autumn.

The hit to the BBC’s commercial revenue means that the likes of BBC Studios will return less money to the public service arm of the BBC, which is primarily funded by the licence fee. This is partly why the BBC has said it will have to make £125M of additional savings this year as part of its response to coronavirus.