The efficiency of radio production at the BBC - Public Accounts Committee Contents

3  The cost of the BBC's radio presenters

13. The cost of presenters (the 'talent') makes up a significant proportion of the BBC's radio production costs, although the cost varies from programme to programme. For the reasons set out in paragraph 2 above, the Comptroller and Auditor General did not have access to information on presenters' salaries. The BBC confirmed, however, that for most radio programmes, presenters' salaries represent the majority of programming costs. In respect of the BBC's breakfast and 'drive-time' shows, presenters' salaries account for over three-quarters of total staff costs.[14]

14. In May 2008, the BBC Trust published a report by its consultants—On-screen and on-air talent—which examined whether the BBC was paying more than the market price for its presenters and whether the BBC was, as a consequence, creating inflationary pressure in the market for on-air talent. The BBC Trust told us the consultants' report concluded that the BBC was not paying more than the market price for talent and, indeed, that it may well be paying less. While this was the consultants' conclusion for the BBC as a whole, the report in fact concluded that "fees paid by the BBC for a small number of top talent working in Network radio are much higher than those offered on commercial radio".[15]

15. The BBC justifies the high costs for some presenters because of the large audiences they reach and the resulting low cost per listener hour. The 2008 consultants' report recommended that the BBC uses a wider range of data, benchmarking information and internal challenge, to assist it in considering talent policy and specific deals, rather than a heavy reliance on comparing relative cost per listener hour.

16. The 2008 consultants' report, to which the BBC referred us, found that on average the BBC had until recently been increasing Network radio talent fee rates per hour, while commercial radio had been cutting rates to reflect a depressed radio advertising market and increased audience fragmentation. The consultants suggested that the BBC does not always realise the strength of its own bargaining position when negotiating contracts with presenters and performers, and the benefits to talent of exposure on the BBC. The BBC said it was now challenging individual Divisions to drive better value out of their contract negotiations and that it expected the current market conditions and the BBC's attractions as a broadcaster to result in it spending less on top talent than in the past.[16]

17. The BBC has agreed confidentiality agreements with some presenters even though the agreements cover the use of public money. This Committee is against the use of confidentiality agreements which places public money outside of parliamentary scrutiny. According to the BBC, confidentiality agreements in relation to presenters' salaries are standard practice in the media industry. While the BBC assured us that it has attempted to use the BBC's status and range of broadcasting opportunities to negotiate talent contracts at a discount to their commercial value, it has not used its position in the market to influence the terms of contracts with talent.[17]

14   Q 4; C&AG's Report, para 55, Figures 16, 17 Back

15   Qq 16, 38; BBC Trust Report, On-Screen and On-Air Talent including an independent assessment and report by Oliver and Ohlbaum and Associates, May 2008 Back

16   Q 38; BBC Trust Report Back

17   Qq 19, 34, 38 Back

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