The BBC scandal that triggered the resignations of two top executives, has put the spotlight on the British public service broadcaster’s business model, already under political and commercial pressure.
Director-general Tim Davie and head of news Deborah Turness stepped down yesterday after the leak of a damaging internal memo that alleged the BBC aired a misleading edit of United States President Donald Trump’s remarks in its flagship current affairs programme Panorama.
After a week of silence, BBC chair Samir Shah apologised for the edit as “an error of judgment” today.
The BBC said separately today that it had received a letter from Trump threatening legal action over the report. The letter, seen by Bloomberg and dated November 9, calls for a retraction, apology, and compensation for Trump.
“It’s a pretty extraordinary set of circumstances, the director-general and head of BBC News leaving,” said Dr Phil Ramsey, a media lecturer at Ulster University.
He added that the broadcaster’s current funding model is “not sustainable” with the rise of streaming.
The BBC is about to enter sensitive talks with the United Kingdom Government over its next funding settlement.
The broadcaster is funded by the television licence fee, paid annually by UK households that watch or stream BBC programming on any device, which provides more than two-thirds of its £5.5 billion ($12.8b) annual revenue. The rest comes from the sale of advertising and licensing shows overseas.
The broadcaster’s unusual funding model is anchored in a Royal Charter, a document issued by the monarch that sets out its mission to serve the public interest, deliver impartial news and cement its independence from editorial interference.
The current charter, in place since 2017, expires at the end of 2027, triggering a review of the broadcaster’s purpose, governance, and financing.
A major change to the funding model could prove existential and reverberate beyond the UK.
The BBC’s chartered status makes it a much-loved and much-scrutinised institution at home, but also a popular source of truth abroad.
The BBC says it reaches 94% of adults in the UK.
Its coverage of international conflicts, crises and elections has boosted its international audience year-on-year to reach 418 million people on average every week.
Its total audience is close to half a billion people per week, according to its most recent annual report.
But polarisation in media and politics, amplified by social media, has put the corporation in a delicate position.
The BBC cannot respond nimbly to critics, and it is increasingly difficult to define what’s in the public interest.
Once viewed as an impartial institution, the BBC is now routinely accused of bias by both ends of the political spectrum.
Similar battles have engulfed public service broadcasters elsewhere.
In the US, for example, NPR and PBS have faced partisan attacks.
The Trump Administration cut their federal funding with an executive order titled “Ending Taxpayer Subsidisation of Biased Media.”
A spokesperson for British Prime Minister Keir Starmer said today that the BBC is not corrupt but emphasised that it was important for the organisation to deal with mistakes swiftly and correctly.
The BBC was already under significant commercial pressure as younger audiences eschew paying the licence fee in favour of streaming services such as Netflix, Amazon Prime Video, and Walt Disney Co.’s Disney+.
The broadcaster has been able to grow its commercial revenue - which accounts for about a third of the total - by licensing shows and selling advertising overseas. In the UK, BBC content has no ads.
Prior to the resignations, there had already been significant debate over whether the BBC should scrap the licence fee, which currently costs households £174.50 per year, and consider alternative funding models including subscriptions or advertising in the UK.
Culture Secretary Lisa Nandy last month indicated that the Government was considering a “mixed funding model” for the BBC, combining the licence fee with subscriptions and commercial revenue.
The controversy could impact the BBC’s ability to sell advertising abroad, particularly in the US.
Trump described the departing executives as “very dishonest people” who tried to influence the US presidential election.
“There’s definitely the question of reputational damage and whether advertisers want to be associated after the Trump situation,” said Bloomberg Intelligence analyst Tom Ward.
“I wouldn’t be totally surprised if Trump even weighed in and pressured advertisers and content buyers not to spend with the BBC.”
Conservative political commentators have used the episode to renew long-standing criticism of the broadcaster.
Nigel Farage, leader of political party Reform UK, said the BBC had “systemic political bias”.
Conservative Party leader Kemi Badenoch also weighed in, saying recent events at the broadcaster had “exposed institutional bias that cannot be swept away with two resignations”.
But public support for the BBC “hasn’t meaningfully changed”, said Claire Enders, founder of the industry research firm Enders Analysis, adding that the broadcaster can’t simply be “abolished”.
Davie did the right thing by standing down, she said, particularly after a string of other controversies such as its coverage of the Glastonbury music festival.
The BBC was subject to complaints after airing a set by the punk duo Bob Vylan, during which the musicians led a chant of “death, death to the IDF”. The footage was aired on the BBC’s iPlayer streaming platform.
“The buck stops with him,” Enders said of Davie.
The search for the next director-general, who serves as both the chief executive officer and editor-in-chief of the BBC, an organisation with about 21,000 employees, is typically a months-long process carried out by the BBC board.
The Government does not directly choose or approve the candidate.
Among the contenders to replace Davie is Australian TV executive Jay Hunt, who held senior roles at the BBC and Channel 4 before moving to a senior role at Apple Inc. in 2018.
Other potential candidates include Charlotte Moore, former Chief Content Officer at the BBC, and Channel 4 chief executive Alex Mahon.
“Few people are habituated to running an organisation the size of the BBC,” said Enders.
- With assistance from Michael Shepard and Alex Morales.
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