Former GB News chairman Andrew Neil has told Parliament the channel will not “ever be profitable” on its current path.
Neil, a former BBC presenter and Sunday Times editor and the current chairman of The Spectator, also said he had been “surprised how tolerant” Ofcom had been of GB News, which is currently the subject of multiple investigations by the regulator.
Neil made the comments before a House of Lords Communications and Digital Committee hearing into the future of news on Tuesday.
‘It’s not a very big niche, and it’s not a niche that can ever be profitable’
Asked how GB News might have looked today had he not left two weeks after the channel launched, Neil said: “First of all, the production values would have been much higher. It would not have looked as if it were coming from the nuclear bunker of the president of North Korea.”
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Neil quit GB News over technical issues around the time of the channel’s launch as well as what he saw as a drift toward Fox News-style broadcasting, which he told peers would be “bad for Britain and I don’t think there’s a market for it…
“What I didn’t want it to become – I could see it was happening, which is why I left almost immediately – was an outlet for bizarre conspiracy theories or anti-vaxxers or, basically, the nutty end of politics.”
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He said he was “quite surprised that GB News has survived as long as it has, and I’m even more surprised that it saw off TalkTV. I actually thought TalkTV might do us real damage at GB News, because it did have better production values and it wasn’t so conspiracy theory [minded]…
“I think GB News has found, to my surprise, a niche for itself. But it’s not a very big niche, and it’s not a niche that can ever be profitable.”
Last week GB News chief executive Angelos Frangopoulos informed staff that the publisher was opening its first-ever redundancy round, seeking to cut 40 roles – equivalent to approximately 14% of its average headcount in the year to May 2023. The company is currently asking staff open to voluntary redundancy to come forward.
GB News recorded operating losses of £42.4m in its most recent accounts, representing a 38% increase on the year before. It has reported total losses since launch of £76m.
Neil continued: “Whereas the original business model was to break even by year three, I think I’m pretty safe in saying that won’t happen. If there’s a bunch of people who want to carry on financing it because they like the ideology that’s up to them, but I find it very hard to see how it could ever be profitable – or even break even.”
Neil similarly added that TalkTV, which is planning to go online-only in the coming months, had made a mistake by “invest[ing] in massive studios and massive overheads – but its revenues were never going to match that”.
He said that had he remained as chairman of GB News “I would not have had any politician present a television show in the first place – and I would certainly never have allowed politicians to interview other politicians from the same party. I mean, I just find that incredible”.
He added he was “surprised how tolerant Ofcom has been of GB News. It may be because Ofcom knows that the rest of the broadcast universe is on the centre, centre-left band, and so it gave GB News a bit more leeway to try and settle down.
“I am surprised that any regulator would allow politicians sitting in the Houses of Parliament to present political TV programmes… on these areas Ofcom needs to find a backbone, and quick.”
Last month Frangopoulos himself told the same Lords committee that he was “very confident” GB News could become self-sufficient financially, “but we have a lot of work to do”.
Andrew Neil expresses concern over hedge fund ownership of newspapers
Asked about the prospect of GB News backer Sir Paul Marshall acquiring The Daily Telegraph, The Spectator’s sister newspaper, Neil said: “I’m not at all relaxed, although who the proprietor of The Daily Telegraph is is not my business…
“I took The Spectator out of The Telegraph to make it a separate, standalone company so that it would have its own ethos and its own way of doing things.”
Marshall made his money through hedge fund Marshall Wace, and Neil said: “Hedge funds – one of the things they do is they short stocks. Well, enterprising journalists… will be very quickly looking at the coverage of [some] businesses in the Telegraph and what stocks are being shorted… I think it’s a real issue. Should hedge funds be allowed to own newspapers? I would say no.”
Spectator has ‘never been more profitable’
Neil said that The Spectator has “never been more profitable” than it is now and that it has never employed more journalists or had more subscribers.
He credited much of the success of the business to its subscription model, saying: “I can tell you, as someone who’s lived under both an advertising-led business model and a subscription-led business model, the subscription-led business model is much much better, because the interests of journalism and your readers are aligned.
“They’re paying for your journalism. They’re not paying for an ad finance operation, they’re paying, basically, for a largely ad-free environment, because it’s a premier website or a premier app, and therefore they expect high-quality journalism.
“And they won’t pay if you don’t give it to them. They won’t pay for The Sun online. They won’t pay for the Mirror online. They will pay for The Times, the Financial Times, The Telegraph, [and] The Guardian when it bothers to ask them.”
He added that The Spectator has not made any redundancies since 2004 when he became chairman – a role which he said “essentially involves being chief executive and editor-in-chief”.
Neil told peers: “If you want to see what GB News would have been like if I had been in charge watch Spectator TV. Spectator TV has good production values… and we make money. We get sponsored and we get advertising, and we use it as a vehicle for selling subscriptions, so it’s a mutually reinforcing business model that helps us to get more subs while extending the brand.
“We’ve now launched Spectator Australia Television, which looks fantastic and is doing very well. I may, if I’ve got time before a new proprietor takes over and I head to the great newsroom in the sky, try it in America too.”
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