BBC Must Cut Budget

LONDON BBC director general Mark Thompson said the company would have to achieve cost savings of $580 million over the next three years — in addition to the $760 million cut in recent years. He pledged to “partner and collaborate” with struggling commercial broadcasters.

His comments come as politicians and broadcasting executives have questioned the BBC’s guaranteed $5.1 billion annual license fee income at a time when commercial rivals are seeing their own income drastically reduced.

Thompson said the BBC needs to achieve the savings because otherwise it might exceed its borrowing limits.

The ongoing cost cutting could translate into job cuts beyond the 7,200 already lost and another 1,200 still under negotiation, he said, adding that, unless it cuts spending, the BBC will be in breach of its banking covenants.

Thompson said that, at a time when commercial rivals are facing a revenue “abyss,” the BBC will take “tangible, measurable steps to partner, support and share some of its advantages with other media players.”

He cited regional news collaborations and plans to share facilities with ITV, collaborative talks between BBC Worldwide and Channel 4 and the BBC’s offer to share its on-demand platform iPlayer’s technology as supportive actions.

“A situation where the BBC thrives and the rest of the U.K. media struggles is, for a whole number of reasons, not a satisfactory state of affairs,” Thompson said. “This efficiency story is by no means complete.”

Earlier this week, opposition Conservative Party leader David Cameron said the BBC’s guaranteed income increases should be frozen while the advertising markets remain hard hit.

But Culture Secretary Andy Burnham dismissed the suggestion, arguing that the increases have been agreed to and formally ratified in Parliament.

Thompson was speaking at the MediaGuardian Changing Media summit.