Channel 4’s Alex Mahon Says “We Are In Market Shock Territory” & May Draw Down On $94M Credit Facility Next Year

deadline.com:

Channel 4 is in “market shock territory” and may finally look to use its £75M ($94M) revolving credit facility next year, according to CEO Alex Mahon.

Mahon faced a barrage of questions about the embattled Gogglebox broadcaster’s finances from the Culture, Media & Sport Committee this morning and was at pains to stress how bad the ad market has been this year and its impact on Channel 4.

In line with rivals, she said Channel 4 hasn’t seen predicted recoveries in H2 or Q4 of 2023 and revenues will likely be down around 8% for 2023, while the channel expects to post a deficit following three years of surplus. “We are in what I would probably call market shock territory,” she told MPs. “This level of ad fall was only deeper in the 2008 recession.” In a marked change of position, Mahon said she “imagines” Channel 4 may “look at how to use” the credit facility next year, which she described as “the normal course of business.” Channel 4 last drew down on the facility, which has just been renewed until 2027, at the start of the Covid-19 pandemic, but it has been under pressure in recent months to explore the move once again, given the commissioning slowdown and amidst criticism from producers for declining program spend.

Mahon stressed that Channel 4 “won’t be depending on state subsidies.” “The reality is that over the past years we have made a surplus in six years and a deficit in four,” she added, pointing out that while last year’s surplus was just £3M, the year prior it was at a record £101M, which led to a big boost in content spend.