New C4 boss to face rough multichannel waters

Horseferry Road

Outgoing Channel 4 chief executive Mark Thompson was still at his desk last week awaiting the outcome of contractual discussions between his current and future bosses, but all the talk in the media world was of a job half done.

Certainly, his departure was the last piece of news C4 chairman Luke Johnson needed to hear a week before the station’s so-called Black Friday.

Even having fixed many of the leaks in the company’s hull during his two years in charge, Thompson leaves C4 tossing on the treacherous multichannel seas with programming supplies running dangerously low.

Strong imports such as Frasier, The Sopranos, Friends and Sex In The City have all finished and ER is on its way out.

There is a hole to be filled where RI:SE once was – indeed, the station has never repeated the early-morning success of The Big Breakfast – and the loss of Graham Norton to the BBC has left another vacuum.

Add into the equation a hugely competitive television landscape in which even the continued existence of C4 in its current form is by no means guaranteed and you begin to appreciate the task awaiting Thompson’s successor.

Clearly, all state-owned C4 needs now is someone with a sharp business brain, a strong nerve, a vivid programming vision and international negotiating clout. Fortunately, Johnson has found a philosophical place from which to survey the challenge.

“This is a channel that, by its very nature, embraces change,” he says. “It tends not to keep its chief executives for all that long.

Mark has left Channel 4 in very good form – we’re doing well in the ratings, our profits trebled last year. I think this year’s shaping up well from an advertising point of view and we’ve had a very good run of quality programmes.”

C4’s needs are very different from what they were when Thompson took up the post in 2002. The 23-year BBC veteran arrived with a glittering programming resumé and proceeded to cut his commercial teeth on C4’s financial crisis. He turned 2001’s £28m loss into a £45m pre-tax profit in 2003, partly by bringing the axe down on troubled commercial concerns, including Film Four.

“Channel 4 is in reasonably good shape – a lot better now than when he [Thompson] joined,” says Andrew Canter, head of client services at MPG.

Competitive pressures

But if C4 has smartened up its act, it is now in the thick of a multichannel revolution and both its ratings and its revenues are under greater threat than ever. Many in the media world take the view that the new chief executive’s first responsibility will be to plug the gaps in the schedule. Johnson acknowledges that it is not that simple.

“Although the business is back in surplus and ratings are strong, if anything the competitive pressures have increased [since Thompson joined],” says Johnson.

“Freeview has exploded since then, Sky has grown – there’s no let-up in the new multichannel world and we still have to react.”

Pet Thompson projects such as the proposed merger with Five or the persistently rumoured amalgamation of the two channels’ sales houses – possibly also with that of Sky – remain on the table. There are other possibilities too – it has been suggested that C4 could operate as a trust in future, or that Ofcom may top-slice the licence fee to provide public funding.

“Nothing is discounted,” says Johnson. “The process of examining the various options for what Channel 4 should do longer-term is underway and I think the momentum will be maintained.”

The first threat to that momentum is already at hand – the loss of the US imports will be felt hard at both C4 and E4, not least because replacements don’t just grow on trees.

“They’ve done well with those, but programmes with that audience pull aren’t that easy to find and, when you do find them, they’re not cheap,” says Alan Flitcroft, a partner in Ernst & Young’s media and entertainment group.

At the same time, the impact of C4 director of programmes Kevin Lygo’s return from his stint at Five will shortly be felt and should do much to take the heat off the new chief executive in programming terms.

“Lygo is extremely strong in terms of scheduling, so maybe the need to get somebody who’s got a massive reputation in terms of programming is not so great,” suggests Chris Hayward, head of TV at ZenithOptimedia.

There are those who believe the departure of the shrewd, steady Thompson offers C4 the opportunity to open a new chapter altogether.

“It had its difficult period where it had gone into all its different ventures and financially overstepped itself,” says Initiative chief executive Jerry Hill. “Mark Thompson has come in, reduced its workforce, culled a lot of things and brought it all back onto an even keel. He’s been a safe pair of hands and you get the feeling that now it might want to make a bit of a noise.”

C4’s finances have been saved but its reputation for edgy, agenda-setting programming is in need of a boost. A colourful chief executive who can personally project the broadcaster’s brand might yet prove to be exactly what is needed at Horseferry Road.

“There’s always a great temptation in the world of entertainment to have charismatic leaders who are good at being seen to stand for the brand they represent,” says Hill. “I sense Channel 4 needs to go a little bit down that path to get a real sense of purpose and identity into what it does. It has been quietly, busily doing what it does and I think it needs a little burst of drama, some theatre.”

Prodigal sons

While the money may not be the best in broadcasting and the challenges among the most numerous, the BBC’s readoption of prodigal sons Thompson and Grade illustrates one of the key attractions of the C4 chief executive’s job. In a changing world, the BBC needs executives whose instincts have been honed at the highest level of commercial programming.

“There’s no doubt that, for someone who’s looking to take over from Mark Thompson at the BBC in three years’ time, or however long it is, being chief executive of Channel 4 is not a bad place to be,” says Hill.

Accordingly, it has not taken most pundits long to identify Sky Networks managing director Dawn Airey as the favourite for the job. The names of BBC director of television Jana Bennett, Talkback Thames chief executive Peter Fincham and United Business Media chief operating officer Malcolm Wall have also come up, as they did when the job was last available.

Lygo is also expected to be in the frame, along with Endemol’s Peter Bazalgette, John Willis, the BBC’s director of factual and learning, and even Warner Music Group’s global chairman and chief executive, Roger Ames.

“I think that probably we’ll need to recruit someone from within the media industry who understands the economics and the pressures,” says Johnson, who adds that he has no single ideal candidate in mind at this stage, but expects to make an appointment by the end of July.

Breeding grounds

C4’s head-hunt is already a very different thing to the BBC’s director-general trawl. Whereas the BBC is its own breeding ground – Bazalgette last week described 23-year Auntie staffer Thompson as “a man with the letters BBC in his DNA” – C4’s lot has been to help school high-quality executives for other networks.

What C4 does have is a potential for mischief and provocation that is not shared by any other major broadcaster.

Not only that, but its list of chief executives is both illustrious and, despite what Johnson suggests, fairly short: Sir Jeremy Isaacs, Sir Michael Grade, USA Entertainment CEO Michael Jackson and Thompson constitute the roll of honour to date. While Thompson did not stay long, he was a typically well-chosen recruit.

“With Mark Thompson, Channel 4 unearthed someone who may not have had the reputation for running a strong, commercially minded organisation, but although that was not one of his traits, he did come into his own,” says Hayward.

“It’s got an ability to choose the right people. Mark’s done an extremely good job, but Channel 4’s history shows it’s good at selecting successors.”

This time, though, Johnson and co are, maybe, hoping to choose one who’ll stick around a little longer.

This article was first published on Media Week