The BBC‘s financial deficit is projected to reach nearly £500M next year as the corporation delivers what it has described as a “transformational budget.”

Unveiling its Annual Plan this afternoon, which sets priorities for the coming year, the BBC forecast a deficit of £492M ($620M) for 2024/25, a sharp rise of 40% from this year.

Explaining the hefty jump, the BBC said its plan to grow BBC Studios “drives higher income” and “requires significant investment in 24/25, contributing to the group operating deficit,” while pointing out that this year will also include big expenditure on sporting events such as the summer Olympics and European football championships.

“Our financial plan includes a transformative approach to savings to enable delivery of our strategic ambitions,” it went on. “This will require a number of difficult decisions over the course of the year including one-off transformational costs. Ultimately savings will help to deliver reinvestment in our audience offering and set the BBC up to succeed as audience consumption patterns change.”

Following this year’s “transformational budget,” the BBC said the plan should return to an investment and expenditure surplus for the following year, “as new savings programmes are established and
commercial growth is established.”

“A number of announcements” are incoming throughout the year relating to these “transformational costs,” it said.

Director General Tim Davie revealed earlier this week that the BBC will look for a further £200M annual savings and reinvestment by 2027/28.

“Remixing budgets”

But overall content spend will rise by around 8% and spend on TV programs by a similar amount in 2024/25, according to the plan, a boost of £146M with those major sporting events in mind.

The BBC said it is “remixing budgets to maintain investment in video commissioning” and will “shine a spotlight on the full diversity of our audiences” with shows including Blue Lights, Dinosaur and Welsh drama Lost Boys and Fairies.

The plan talked up the growth of BBC iPlayer, coming a few days after the BBC acknowledged it will now only commission shows for young people for the VoD player, foregoing the linear BBC Three channel.

“It is critical that BBC iPlayer continues to be a destination of choice for audiences in the UK and that means offering a rich mix of content to appeal to all,” said the plan. “We will do this through a combination of new commissions, growing our catalogue of past shows, and bolstering our offer with acquired content.”

High-profile acquisitions of late have included Suits from NBC – last year’s most-watched show on Netflix – along with HBO Max Europe series Spy/Master.

Notably, the BBC said “we will continue to seek exclusivity on key titles to give audiences more reasons to come to the BBC over the largely global streamers.”

Last year’s Annual Plan set the BBC’s path for a number of years by revealing it would be cutting shows by an eye-watering 1,000 hours per year, which has started to be realized in cheaper genres, although less so in scripted, according to research published by Ampere last week.

Today’s plan dropped two days after a major set-piece from Davie in which he addressed the “elephant in the room – money” head on, flagging the difficulties of “deploying capital to fund long-term growth” in the current media landscape and off the back of a 30% cut in real terms income between 2010 and 2020.

Davie said he is seeking “major global partnerships” with the tech players in order to boost investment to the corporation.