Thursday, 20 July 2017

Does the BBC Understand How Markets Work?

So I'm confused. If the top paid employees of the BBC had been more evenly distributed between men and women would that have made it all okay? If the top paid DJ had been Zoe Ball rather than Chris Evans would that have been less embarrassing for the corporation? Is Laura Kuenssberg spitting blood because she came back to the Beeb from ITN and undersold herself?

The BBC's excuse for all of those frankly ludicrous salaries is that this is driven by the market. This is demonstrably absurd. The BBC is by far the biggest broadcasting organisation in the country and in certain key markets is the only game in town. And yet it is paying eye watering sums to presenters despite the fact that there is no real competition for the talent it is employing. Everyone was expecting the top paid presenter to be Graham Norton. And that would be more defensible because there is more of a market for his services. But instead it is Chris Evans who is paid £2.2 million to be a DJ on the only national radio station for which he could work. Would Evans really leave Radio 2 if his salary were cut in half and then in half again? What about the other ludicrously overpaid Radio 2 presenters like Steve Wright, who essentially spends most of his programme reading out the news? Or Jeremy Vine. What other station could he work for?

You can make a case for Claudia Winkleman and Tess Daly's vast remuneration as they are presenting a massive hit show and would be in demand were they to leave. You can't however make a case for Gary Lineker's silly salary; he could easily be replaced by any number of perfectly acceptable presenters at much lower cost. People after all watch for the football not to hear his midland tones and perfect pecs when he loses a bet. And how is Alan Shearer worth his mega salary? His fellow pundits don't make the list despite many of them being better at the job and more charismatic.

And go down that list and you see other examples of BBC managers who clearly don't understand how markets work. In order for them to use the defence of them needing to pay the market rate there needs to be a market in operation. There isn't. Are there really commercial rivals vying for the signatures of Jason Mohammad and Mark Chapman? They are good and professional presenters but worth a quarter of a million quid a piece? How are they worth so much more than the excellent Emily Maitlis who isn't even on the list meaning she earns less than £150k? And what alternative employment is Radio 4's Eddie Mair going to find to justify his being paid £300,000? Eyebrows have been raised too about Stephen Nolan's £450,000 a year. Who? Nolan works for late night Radio 5 Live and for BBC Northern Ireland. Perhaps he was part of the deal with the DUP.

John Humphries opined yesterday that it seems odd that he needs to justify his salary by means of showing that he could get more money elsewhere, although at least he was honest enough to admit that he loves his job and loves working for the BBC and so would not seek more money elsewhere anyway. But he misses the point of how salaries are set. That is how the BBC justifies them. It is nonsense. Many of us have loved working for the BBC down the years and did so for normal salaries grounded in reality. Humphries is good at his job and his salary was artificially boosted by offering him a quiz show so as to make him look more value for money. But he isn't value for money. He has a great job doing something he loves doing. He shouldn't be on minimum wage but it's hard to see why he should be paid 4 times more than the politicians he gives a daily grilling to.

This is a clear case of BBC management failing once again to manage. The vast majority of BBC staff earn salaries that are good if not spectacular but who have the satisfaction of working for an organisation they are proud of. These are not big stars we are talking about here, they are mostly presenters and newsreaders handed extraordinary sums for no obvious reason other than the BBC's usual poor financial control and willingness to lavish our money on things it doesn't really need. Huw Edwards has managed to persuade managers that he is worth half a million quid when he has no obvious alternative employer and certainly nothing like the same opportunity to present such a wide range of programming for so large an audience.

Then there are the mega salaries of various interchangeable soap opera actors or the astonishing fact that the BBC is paying Derek Thompson, who has been playing Charlie in Casualty badly for the last 30 years in its execrable soap Casualty. The BBC has no business making so much of this bilge at all. That it is paying actors with the range of Thompson an arm and a leg just adds insult to the kind of injury they so poorly depict in their dramas.

As for the Radio 2 salaries, well they are out of control and should be curtailed with urgency. Why any of them should be getting paid so much more than the likes of Simon Mayo and Ken Bruce is hard to fathom. Radio 2 has long pursued a policy of employing big star presenters and is clearly paying accordingly. But has it stopped to ask if it could get away with paying less? How is Chris Evans worth so much more than his colleagues. Answer: he isn't and could easily be replaced with little or no consequence for the audience. Not that this would happen. Evans loves his gig. He has nowhere else to go.

All of this does however hand an excellent response to ministers currently negotiating with the EU. When the results of their travails are revealed in the coming months and they are taken to task by the BBC about them they have a perfect response. Given what you were prepared to pay Chris Evans, Gary Lineker and Jason Mohammad, it's probably fortunate the BBC was not negotiating for the country.

Here's a tip for managers the next time contracts are negotiated. Just say no. Then see what happens. I think we can all guess that the outcome will not be a mass exodus to ITV, Channel 4, Capital Radio and LBC.

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