The first thing that strikes you about Channel 5’s HQ building, nestled among the restaurants and designer shops of London’s Covent Garden, is how small it is. It’s a perfectly decent office and has the glamorous, buzzy feel you would expect of a national broadcasting organisation, but compared to the vast edifices of the BBC and its commercial rivals, it is very modest indeed.
Grant Murray, a Scotsman who became the channel’s finance director in January 2001, soon makes the reason for this clear; with the exception of a few children’s shows, Channel 5 does not actually make television programmes. ‘It’s a publisher broadcaster,’ he says, explaining that the channel either commissions other people to make programmes for them, or it buys them. ITN, for example, is paid by Channel 5 to provide news, while other programmes, such as drama series CSI: Crime Scene Investigation, a favourite of Murray’s, are acquired.
The channel’s annual programme budget is around £150m. Consequently, Channel 5, which still likes to call itself the ‘new kid on the box’ despite celebrating its fifth birthday in March, employs only around 250 full-time staff.
Although yet to actually make any money for its two shareholders – broadcasting giants RTL (65%) and United Business Media (35%) – the channel is increasingly proving itself as a serious rival to the BBC and the ITV channels in terms of attracting both viewers and advertisers. Its average audience share for 2001 was 5.7%, and is up to 6.4% so far this year.
And break-even, according to Murray, is in sight.
Channel 5 describes itself on its website as ‘young and very ambitious’.
The same could be said of its finance director, although he is far more modest about his own achievements than he is about those of his employer.
After growing up on the west coast of Scotland and doing a science degree at Edinburgh University, Murray moved down to London.
Starting out at Andersen
It was, he says, ‘time for a change’ – so he started a training contract in the tax arm of Arthur Andersen in 1986.
‘As an ex-Andersen person I feel very sorry for the people I still know there,’ he says of the firm’s post-Enron disintegration. ‘For them it is a personal tragedy and I don’t think anyone in the accountancy profession can take comfort from Andersen’s collapse.’
Four years later, and equipped with an ACA, Murray went to work for the Rank Group as group taxation manager. But he tired of tax. ‘I had always been more interested in general finance and business, so I decided it was time to do an MBA.’
He enrolled at Edinburgh University for a year-long course and graduated in 1996 at the top of his year. ‘You’ve got to really want to do it before you make the commitment,’ he says of MBAs. ‘I wanted to change what I was doing and the MBA seemed a nice way to do it.’
An interview by video-conference towards the end of his course led to a two-year stint at Rank’s film and entertainment division in Los Angeles.
First FD role
Then followed stints as director of financial control of Rank’s leisure division, and his first FD role, heading the finances of United News and Media’s broadcasting and entertainment operations.
In 2001, at the comparatively young age of 37, he became FD of Channel 5. Murray says he never harboured any youthful ambitions to break into the broadcasting industry, but says that now that he’s here, he likes it. ‘It’s an industry everyone can relate to. It means a lot to most people and there are not many people whose lives are not touched by it. As an industry it is quite exciting.’
He also enjoys the atmosphere at Channel 5. ‘It’s a small company relative to any other broadcaster. People who work here take on a huge amount of responsibility and have a huge amount of commitment. Channel 5 is not an institution.’
Like many FDs, Murray’s role extends beyond pure finance to cover functions such as IT, human resources and operations.
‘A lot of my job is assisting other people to do their jobs,’ he comments.
A team of 35
In the finance department, he is supported by an experienced financial controller and a team of around 35. Careful control and monitoring of costs is a major issue. Like all commercial broadcasters, Channel 5 has been badly hit by the slump in advertising. As a result, its hopes to enjoy its fifth birthday this year as a profitable organisation were dashed.
‘Channel 5 would have been in a position to break even last year,’ says Murray. ‘Unfortunately because of the downturn in the advertising market we did not do that. We are moving towards breakeven but we are not quite there yet. It won’t be this year.’
Channel 5 has yet to file its 2001 accounts, but its 2000 accounts show a pre-tax loss of £35m on a turnover of £213m – almost all advertising revenue. Revenues fell to £198m in 2001, but, says Murray, current forecasts indicate the 2002 figure will exceed the 2000 figure. One of Murray’s achievements since he joined the channel has been to reduce its cost base by 10%.
‘Our aim is to run the place very efficiently so that any money we have goes on the programme budget,’ he says. Non-programme costs amount to around £100m a year, and include a license fee to the Independent Television Commission and its payment to NTL for transmission services. Murray is keen to draw attention to the channel’s achievements. ‘In what is still a relatively flat advertising market, Channel 5 has been outperforming the market significantly. Our ratings have been steadily rising and this year are well ahead of where we were last year.’
Strong programming schedule
He also highlights the channel’s increasingly strong programme schedule, which, he says, ‘has something for everyone’. Channel 5’s offering includes documentaries, films, soap operas, sport, children’s programmes, ‘adult’ entertainment, news and drama.
Pictures on the wall of the meeting room where Murray is being interviewed show some of the channel’s better known shows and films; Fifth Gear, Home & Away, Gladiator, Family Affairs, Bear in the Big Blue House and CSI.
Murray comments: ‘Our audience shares continue to grow, and the quality and reputation of our programmes continues to grow. Touch wood, everything is going very well at the moment and there aren’t too many clouds on the horizon.’
He hopes that Channel 5 will continue to increase its share of peoples’ viewing at the cost of the BBC and ITV.
Murray lives in Hampstead with his wife and young son. Away from work, he enjoys playing golf, watching rugby and travel. His working day starts around eight and finishes around 6.30pm, although he quite often attends evening functions. There is, he says, no typical day, and much of his work is project or issues based.
Currently he is preparing a submission on the government’s draft Communications Bill for a joint committee of the House of Lords and House of Commons.
New broadcasting system
He has also been busy with the channel’s new broadcast management system, implemented at the beginning of the year, which controls programmes from the planning stage to actual broadcasting, and also captures financial information and that required by the Independent Television Commission.
In addition, Murray says Channel 5 is talking to other broadcasters about how terrestrial digital television can be taken forward after the ITV Digital debacle. ‘People are actively concentrating on learning from mistakes and making sure the end of ITV Digital is not the end of digital,’ he says.
‘Channel 5 is a programme neutral channel. You can get us on cable, on satellite and also on digital terrestrial TV which was the platform on which ITV Digital operated.
‘We are supportive of anything that will boost the take-up and coverage of Channel 5.’