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The row over BBC pay has at last died down to the point where it is no longer the lead item on BBC news, for which we can all be thankful. Still, the impression remains of an organisation uncomfortable with criticism, unused to scrutiny, and unable to understand the basic principles of markets.
The BBC is a monopsony, the only buyer for a certain commodity. It might seem odd to categorise the BBC in that way – surely it operates in a competitive marketplace with top talent ready to be seduced by the siren song of commercial rivals at any moment? Well, that might be true if all that counted for presenters is hard cash, but the BBC offers something more. First, talented people love to be seen and only the BBC really offers huge guaranteed audiences across TV and radio. Second, the incurred status – a new face starts out as a mere Celebrity, but has a fast-track career path to National Treasure. Clare Balding went stratospheric after the 2012 London Olympics. On the other hand, Adrian Chiles left the BBC in a Chris Evans-related strop in 2010 and headed to ITV for around £4.5m per year. That turned sour and he is now an infrequent face anywhere on TV. Is he richer? Probably. Happier? I doubt it.
For news journalists, the situation is even more stark. There are other news organisations but not that many – ITN, Sky and Channel 4 for TV, perhaps LBC for some political chat, but nothing with the broad impact of the Today programme or PM. Despite occasional moments of brilliance, who exactly would pinch John Humphreys or Eddie Mair? And even if one presenter could be lured away from the Beeb, they couldn’t all be – there aren’t enough open positions in the market.
As for Radio 2, what else would Jeremy Vine do at lunchtimes? Would he refuse to get out of bed for less than £3000 per day, the Linda Evangelista of talk radio? Many people enjoy Chris Evans’ breakfast show, but lots of people enjoyed Terry Wogan when he did it, and lots of people will enjoy whoever comes next. Does the BBC really need to fork out £2m to find someone sufficiently competent?
Perhaps it is the Guardian mindset that prevails in the BBC, but it seems that there is an instinctive distaste for markets, a sense that they are vulgar, right-wing things that must be suffered rather than tools for achieving optimal utility of limited resources. It is galling when an organisation shielded from market forces by the licence fee pleads them as a defence for paying its own senior people absurdly well. It is also apparent that those with no enthusiasm for markets are the very worst people to operate within them.
Just as a reminder for BBC management, the market price is not set by the person offering to do the job for the highest price, but by the person offering a satisfactory product or service for the lowest price. The going rate for a Newsnight presenter is set by Emily Maitlis (more than satisfactory), not Evan Davis.
The BBC needs to be more relaxed and enjoy the benefits of its exalted position. Let’s assume that the Great British Public are indeed crying out for wall-to-wall Graham Norton – why should it matter to the BBC if the public get their fix on BBC1, ITV, C4 or Sky? As a public broadcaster, it’s role is to “inform, educate and entertain” the licence fee payers – not to develop and nurture individual celebrities. With the imminent return of the Generation Game, the Mel and Sue threat level is also approaching critical. I like them; but they don’t need to do everything.
If any broadcaster should be able to take risks in its programming, it is the BBC. Equally, if any broadcaster should be mindful about how it spends its money, it is the BBC. It should not be inflating market prices with public money, squeezing its rivals. Instead, its unique position as a public broadcaster should free it from chasing ratings and allow it to concentrate on genuine examples of market failure, e.g., making in-depth science and historical documentaries, allowing more sporting events to be broadcast free-to-air, or making serious investments in drama on the scale of the recent offerings from HBO and Netflix.
The BBC cannot plead market forces in its defence when it comes to spending while also demanding protection from the market in how it is funded. It is time for them to choose.