Issue 115: 2017 07 27: Pay At The BBC (John Watson)

27 July 2017

Pay At The BBC

Apples and Pears?

By John Watson

What a change from Brexit!  Most of us get lost fairly quickly if the conversation turns to the economic effects of trade treaties, market access and restricted immigration; however, put a glass in the right hand and everyone is an expert on how much the stars at the BBC ought to be paid.  You know the sort of stuff: “Such a nice man… the viewers love her… deserves more… should be axed… brilliant presenter… no talent… needs to take shirt off more… waffle, waffle, yackety yack… is this chardonnay..? No, sauvignon… is there a difference?… burp… I’ll have another glass.”  Once the BBC were ordered to report on top pay, endless discussion of the figures became as inevitable as it is tedious.  Still, the BBC is financed with our money and it is hard to argue that the public should be denied information as to how that money is being used.  But what a confusing picture it is.

Take Graham Norton as an example.  He and his company invented his show and it would be nothing without him.  A little like Top Gear without Clarkson, if Broadcasting House will forgive me the painful analogy.  If you were deciding how much Norton should earn, the maths would be quite easy.  You would begin by calculating the audience which the show attracts and then you would value that audience.  The last step is complicated by the fact that the BBC does not generate cash from its viewers, but one could easily work out what the extra audience would be worth in advertising revenues to a commercial channel and arrive at a value that way.  That is the value created by the show and the only question is how that should be split between the Norton interests and the BBC.  Perhaps there is an accepted level for such splits or perhaps the BBC sees what ITV would offer and then goes a little bit further. The £850,000 which Mr Norton receives from the BBC ignores the larger sums he receives from the production company.

Now, let’s take a wholly different case; Gary Lineker who weighs in at somewhere between £1.75 million and £1.8 million.  He brings to Match of the Day all the experience of his stellar England career, as well as considerable charm and lucidity.  That is all wonderful of course but he is providing something very different from Graham Norton.  Were he not there, the programme would continue and there would be plenty of applicants to take his place.  How much would you pay Lineker?  The amount which you would have to pay to secure an adequate replacement together with a substantial premium reflecting the additional zing which he brings to the programme.

It is an interesting exercise to split the stars by reference to how important they are to their particular programme.  Most are easily replaceable, however good they may be, so the question is whether others could be found to replace them and how much those others would need to be paid.  The top earning woman, Claudia Winkleman (£450,000 to £500,000), presents Strictly Come Dancing with great skill but could easily be replaced – as was Bruce Forsyth when he decided to retire.  Mary Berry, on the other hand, is unique so during her days at Bake Off should have been earning a premium over the cost of replacing her to reflect that.

Then of course there is a different category altogether, those involved in the management of the BBC. How do you value a Director General or a Commissioning Editor?  Their work is invisible to the public so it is hard for an outsider to value it.  Could they be replaced by someone of an essentially similar experience, or do they bring to their job a flair which transforms the organisation?  Sometimes a really good executive can do that.  Look at what Antonio Horta-Osorio, the current chief executive, has achieved at Lloyds Bank if you want a particularly striking example.

Questions are already being asked as a result of the publication of the figures.  Can it be right that the upper echelons of the table comprise men and that minority groups are underrepresented?  What does this mean about the BBC’s culture?  It is easy to react with generalities and some fairly foolish things are already being said.  The Prime Minister’s disapproval of “paying women less for doing the same job as men” wholly misses the point that it is value contributed rather than actually doing the job which should dictate salary.  Most men think they could do Gary Lineker’s job pretty well but the BBC would be foolish to engage them at his salary.  Then an agent representing women stars claims to be incandescent that its clients are being paid so little compared to the men.  Odd that.  Presumably agents know what their own clients are paid and one would expect an agent representing television stars to be well aware of pay levels throughout the industry.  How then is it such a surprise?

So what should the BBC do as the political storm rages around them?  Should they hike the salaries of their women and ethnic minority stars and stick it all on the licence fee?  That would be a truly weak decision so they will probably be tempted, but actually something more radical would make more sense.  Suppose that the BBC were to use the opportunity to review their list and to think carefully about what each of their stars actually brings to the party.  That would no doubt result in some women or ethnic minority stars being paid more.  If done properly it will almost certainly result in some of them (along with some of their white male counterparts) being paid a great deal less or replaced by wannabes who would do their jobs equally well for lower pay.  Organisations like the BBC are loosely managed and it is always easier to overpay than underpay.  Now they have the opportunity to correct that.  Lord Hall should come out on the front foot.  Now is the moment to regenerate the BBC.

And the agents shrieking that their clients are underpaid compared to others?  They had better give careful thought to what contribution those stars really make; otherwise stirring this particular soup could have unexpected consequences.


If you enjoyed this article please share it using the buttons above.

Please click here if you would like a weekly email on publication of the ShawSheet


Follow the Shaw Sheet on

It's FREE!

Already get the weekly email?  Please tell your friends what you like best. Just click the X at the top right and use the social media buttons found on every page.

New to our News?

Click to help keep Shaw Sheet free by signing up.Large 600x271 stamp prompting the reader to join the subscription list