Gavyn Davies knows all about money. On a personal level, he has an
estimated fortune of £150 million. On a professional front, he was
an economic adviser to the Government at the age of 25 and, now 50, he
has risen to be partner and chief economist at the investment bank
Goldman Sachs and recently came close to the job of governor of the Bank
More to the point, given the job he has now landed as the chairman of
the BBC, he knows all about money and the British Broadcasting
Having chaired the Davies Report on the future funding of the BBC in
1999, he had to get stuck in to the thorny question of how and why the
Corporation should be funded.
For several years during the 90s, Davies was an oft-quoted commentator
on financial issues. He is said to be fascinated by the media, but it
seems unlikely that he spends much of his time familiarising himself
with EastEnders or the Tweenies, since he's known for a huge capacity
for work and an earnest disposition. Though the fact that he has a
£3 million modernist holiday home in Devon for himself, his wife
and their three children - complete with pink-lined swimming pool - and
that he harbours a passion for Southampton football club (he even tried
to buy it) creates a curious contradiction.
Despite unfair accusations of his appointment to the BBC chairmanship
smacking of cronyism (he is a stalwart Labour supporter and his wife,
Sue Nye, runs Gordon Brown's private office but his political views are
hardly as relevant as his qualifications), he's a popular choice at the
BBC. He has already been getting to know its corridors as the
vice-chairman of the board since January this year and senior executives
are happy that someone with his commitment has been given the top
In the run-up to the charter renewal in 2006, his five-year stint will
be a crucial one - especially because it's a moment in time when the
whole definition of the BBC as a public service broadcaster is being
called into question. "Clearly he is a believer in public service
broadcasting," one senior BBC executive says, "and we need to understand
what a public service broadcaster is in the 21st century."
Davies' declaration on landing the job demonstrates that he's on-side:
"The BBC occupies a central place in the life of our nation because of
what it stands for - independence, impartiality, journalistic freedom,
creativity, quality and public service. As the broadcasting marketplace
evolves in the next five years, these are the attributes that will
ensure a thriving future for the BBC."
His financial acumen will also undoubtedly come in handy as the BBC
tries to find £1.1 billion in cuts - the target set by the
Government with the last licence fee hike. The BBC's director-general,
Greg Dyke, despite being well known for his commercial nous, could do
with any help and, naturally, he has made the right welcoming noises
about Davies' appointment. "His grasp of the challenges facing the BBC
and his insight into how to respond to them mean he is highly respected
by the governors and senior management alike," Dyke says.
But Davies hasn't always been flavour of the moment with the
The key recommendations of his report - a digital licence fee and
privatisation of BBC Resources and a chunk of BBC Worldwide, as well as
outside scrutiny of BBC accounts - were opposed by the former
director-general of the BBC, John Birt. Greater scrutiny, Birt argued,
could lead to the Government meddling with the BBC's independent status;
the suggested £24 digital licence fee was not enough; and profits
from Worldwide and Resources should be ploughed back into the
In the end, Davies' suggestions were not adopted by the culture
secretary, Chris Smith.
However, with a new regime under Dyke, there may be room for at least
some of what Davies suggested in 1999 to resurface. Dyke is known to be
in favour of greater accountability, though accountability in what sense
is part of the greater debate about the role of the public service
broadcaster. And the question of the BBC's role and funding in a digital
era will have to be revisited.
As far as the advertising industry is concerned, some of this could be
good news, since there is a broad consensus that the BBC should be more
accountable. However, the existence of the licence fee and certainly its
possible increase is being called into question across the business.
Ian Twinn, the director of public affairs at ISBA, says that Davies
"clearly knows a lot about the issues so he will be a strong chairman,
but he is going to face some tests that he may not want to face. The
funding of the BBC is going to be called into question as fewer and
fewer people turn to the BBC as their channel of choice."
Jim Marshall, the chairman of the IPA media policy group, says Davies,
despite his own recommendations for more financial transparency, might
turn out to be a brake on getting more outside scrutiny. He says:
"Ultimately, if he's a very bright guy and a good money man, it could be
counter-productive and could strengthen the BBC's autonomous position."