Where to go in an organisation that has scant hope of achieving any conceivable growth for the immediate – and, quite possibly, long-term – future? The answer, so it would appear, is “Out”. That’s the core message to be gleaned from BBC director general Mark Thompson’s decision to step down from his role after eight years, with the forthcoming London Olympics coverage to stand as his managerial swansong.

To be fair, there was always the faint whiff of arsenic about the chalice he accepted – reluctantly, and under enthusiastic duress from his supporter Michael Grade – upon taking up the role in 2004, following his predecessor Greg Dyke’s technical knockout at the hands of the Hutton Inquiry. That episode – a piece of vindictive hyperspin whipped up by New Labour comms chief Alastair Campbell – did the same thing to the BBC that Kathy Bates did to James Caan’s ankles in the film Misery, finding the corporation at fault for its claims that the Blair regime had “sexed up” the fabled September Dossier on the case for war in Iraq.

While Hutton has since been extensively debunked – most significantly by Andrew Rawnsley in his account of New Labour’s inevitable decline The End of the Party, which is scathing about the hijack of a key intelligence document by PR wonks – the damage to the BBC’s reputation was vast. Coming in from Channel 4, which he’d led for just two years, Thompson had built his career at the Beeb from 1981 to 2002, knew the turf, and exuded all the “safe pair of hands” credentials necessary to undertake a mission that pretty much involved walking on eggshells every day. ITV’s burgeoning struggle with a revenue drop in the wake of plunging ad sales was cold comfort for a manager faced with a wounded News department that virtually all special-interest bodies accused of bias towards their opposite sides, and governmental relations that made the Arctic Circle look like Montego Bay.

A little local difficulty

Which made it all the more surprising in 2005 when Thompson adopted a “nothing to lose” stance and bet his dog and lot on a request for a hike in the UK licence fee above the rate of inflation. In that bid, Thompson was no doubt emboldened by a vote-free change of tenant at No 10 – with Campbell long since gone – and just as surely crushed when it was dialled down, accompanied by Gordon Brown’s refusal to treat the BBC as a special case. So began the fiscal high-wire act that continues to this day, as the Beeb weathers an onslaught of increasingly cinematic TV dramas from the US that arguably began as early as Twin Peaks (1990-1991) The X-Files (1993-2002) and ER (1994-2009), and has escalated via shows such as The Sopranos (1999-2007), Band of Brothers (2001), 24 (2001-2010), The Wire (2002-2008), Deadwood (2004-2006), Mad Men (2007-present), The Pacific (2010), Boardwalk Empire (2010-present), The Walking Dead (2010-present), Mildred Pierce (2011) and Game of Thrones (2011-present).

The central challenges posed by this formidable opposition have been manifold, but perhaps the most important are i) that those shows have been offered to viewers on charging models that have greatly swelled public suspicion over the licence fee; ii) that they have been made so well – often involving input from Hollywood A-listers – that viewers have pursued those alternative models without breaking a sweat; and iii) that, for the most part, they have been put together without the baleful presence of a nervous compliance department breathing down their producers’ necks.

It was the twin issues of the licence fee and the BBC’s subordination to its own compliance arm that combined to detonate in Thompson’s face with 2008’s “Sachsgate” affair – a little local difficulty involving Manuel from Fawlty Towers, Russell Brand from the stand-up circuit (at that point worming his way into US films), a girl from a burlesque dance troupe, and Jonathan Ross from, er, everything. Critics accused Thompson of being slow to act over the scandal’s trigger event: a prank on Brand’s Radio 2 show in which he and Ross had left a spoof message on actor Andrew Sachs’s phone revealing that the future Mr Katy Perry (and slightly further-future ex-Mr Katy Perry) had “interacted” with the dancer – Sachs’s granddaughter. Thompson practically had to be kidnapped from a Sicilian holiday retreat to scoop up the Daily Mail-exacerbated mess, which led to the suspension of Brand and Ross. But backroom jaws hit canteen floors when it emerged that the only person who would officially go to the wall over the incident was Radio 2 controller Lesley Douglas, who’d tendered her resignation to Thompson and had been accepted: an outcome blasted by her loyal colleagues, including R2 presenter Paul Gambaccini, who claimed he’d sounded a warning over Brand’s initial appointment.

The apparent failure of the Beeb’s compliance regime to forestall the crisis cast an ocean of doubt over its ultimate usefulness, while the suspension without pay of Ross threw his paycheque into the headlines and spurred a public outcry over his fees – supplied, as they were, by the Beeb’s mandatory viewing tax. Even Thompson was tainted when the Telegraph reported that he’d claimed back more than £2,000 of licence-fee money for his eventual return flight from Sicily, topping up his £800,000 wages – a handy precursor to the paper’s coverage of MPs’ expenses.

Cuts across time and space

But the Sachs storm in many ways obscured an even greater crisis. By the time it blew over, Lehman Brothers, Merrill Lynch and other US financial institutions had capsized, and the ripples were travelling far and wide. When the UK General Election rolled around in 2010, criticism of the Brown government’s handling of the economy made it impossible for the Prime Minister – or, for that matter, anyone else – to win an outright majority. It was left to the Con-Dem Coalition to determine the Beeb’s fate, and its decision to freeze the licence fee for six years handed Thompson a fait accompli with which few ambitious managers would be happy to joust. In the cold light of day, the BBC is faced with a massive downsizing exercise to bring the cost of its activities underneath the static ceiling of its funding – and to keep on trimming. Which means that the man who wanted an above-inflation increase in the licence fee will now have to meet a host of below-inflation targets. Or rather, his successor will.

Experienced creatives with links to the Beeb can’t see the situation improving. “How marvellous was it [for the Coalition] to launch those cuts on the licence fee on the day of all their austerity measures?” remarked Doctor Who resurrectionist Russell T (for it is he) Davies in June last year. “It can take cuts. But I don’t imagine these are the last of the cuts. This is a precedent for cuts. Can you imagine it ever going back up again? No.” Intriguingly, one of the most pressing demands on the time (and space) of Thompson’s successor next year will be the venerable Doctor’s 50th Anniversary – an event already muddied by poisonous sniping over the show’s budgetary shortfalls and the botched announcement of plans for a costly spin-off film made with Hollywood backing – a project that could, if well executed, furnish the corporation with those few-hundred extra millions that the licence fee will no longer cover. Or, if it ends up as bungled as its initial PR, would lead to a US production outfit making a mint out of the Beeb’s most valuable slice of intellectual property – a show that, in commercial terms, is the UK’s only serious rival to the US armada.

As a protégé of Who-hater Michael Grade, Thompson is no doubt relieved that he won’t have to worry about it. While the Leveson Inquiry, Operation Weeting and Operation Elveden have put the thumbscrews on News International in ways that should gift the Beeb with an entirely different set of circumstances to those that surrounded Dyke’s exit, the fact is that the downturn Daleks are exterminating the organisation’s strength and vitality with every passing day.

Given that onerous backdrop – and the prospect of being able to move on to any number of private-sector media firms whose remuneration schemes are not so obsessively scrutinised – you can’t blame a guy who has attracted scorn for being the highest-paid head of any UK public body for shrugging his shoulders, waving the white flag… and switching channels.

Highlights from Mark Thompson’s 2010 MacTaggart Lecture

Image of Mark Thompson was originally posted to Flickr by eirikso at http://flickr.com/photos/47402349@N00/3029958618