One sure sign that a sector is facing bad times is when executive bonuses come under the axe and for the media biz that time is now. ITV (LSE: ITV), Emap and Channel 4 are all either slashing bonuses, board-level pay or both and although the simple answer to why could just be “we’re in a recession”, there are specific problems behind each of the decisions. Here’s our run-down of who’s affected and why…
– ITV: All employees at ITV earning more than £60,000, about one in 10 staff, will have their salaries frozen in 2009, according to Guardian.co.uk. The broadcaster is staring down a period of 18 months or more of negative growth in TV advertising spend — ad revenue dropped five percent in 2008 and ITV expects a further six to seven percent drop, or £100 million, this year. About 90 percent of staff will still receive an increase of some sort, though it will be less than inflation for most. The company is in the middle of cutting 1,000 jobs to save about £40 million and plans to save another £35 million with help from Boston Consulting Group.
– Emap Inform: The B2B magazine branch of Guardian Media Group/Apax-owned Emap, publisher of Drapers and Retail Week is freezing the pay of its execs earning more than £50,000 for 12 months while those earning less will get lower than usual pay rises. Emap Inform CEO Simon Middleboe said in an email to staff this week (via Guardian.co.uk) that the freeze, which is not Emap-wide, is designed to “weather the storm” of falling ad revenue. In November the division cut 40 jobs in a bid to cuts its overheads by 10 percent. B2B titles are having problems all of their own right now: Incisive Media recently admitted breaching its banking covenants, while financial B2B publisher Tru-Est went into administration.
– Channel 4: ITV may have got off lightly: no-one at Channel 4 will get a pay-rise in 2009 and execs including CEO Andy Duncan and director of TV Kevin Lygo said no to their contracted 2008 bonuses, reports Guardian.co.uk. C4’s exec bonuses are normally 30 percent meaning that Duncan, who gets about £1.2 million annually, has turned down quite a pay day. The future for the publicly-owned but commercially-owned broadcaster of course remains unknown: it predicts an unavoidable £120 million in its finances by 2012 — a merger of some sort with BBC Worldwide looks to be it best bet and is being considered by Lord Carter in his long-running Digital Britain review.
– Newsquest: The hundreds of Newsquest staff who have been made redundant in recent years may not count themselves lucky, but remaining workers are fortunate not to have suffered the same fate as their US colleagues: a mandatory one-week paycut, affecting 35,000 staff from the top to the bottom of the company.
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