The British state broadcaster BBC, whose two top executives resigned over allegations that a speech by Donald Trump misled viewers, is also facing legal threats and a funding crisis.

US President Donald Trump threatened to take legal action against the BBC on Monday, just hours after the resignations of Director-General Tim Davie and BBC News CEO Deborah Turness over allegations of bias in the state-funded institution’s news coverage.

President Trump warned the BBC of a $1 billion lawsuit for a “falsified” speech.

This dispute, raised by leading figures of the British right as well as by Trump and his allies, comes at a time when BBC executives are preparing to enter a challenging negotiation process with ministers over the rules they must follow and, most importantly, their method of funding.

The outcome of these negotiations will determine whether this historic British broadcaster, once the voice of the empire, will survive in its current form.

“Just firing two employees does not eliminate the cultural problems that lie deep within the BBC and have been going on for decades,” said Nigel Farage, an ally of Trump, leader of Reform UK, and a potential next prime minister of the country, at a press conference on Monday to the cheers of his supporters.

Farage wants the BBC to be downsized

Another issue in Farage’s sights is the restructuring of the BBC’s decades-old funding model, which is based on an annual fee paid by households.

“This is not about Trump. Trump is the last straw of what we have seen in recent weeks, months, and even decades,” Farage said.

The crisis has put Britain’s liberals in a difficult position. In a letter to Prime Minister Keir Starmer, Conservative Party leader Kemi Badenoch, and Reform leader Nigel Farage, Liberal Democrat Party leader Ed Davey called on British politicians to defend the BBC, warning, “The BBC belongs to Britain, not to Trump.”

The BBC’s latest crisis was triggered last week when The Telegraph newspaper published a memo written by the channel’s former standards adviser, Michael Prescott, which addressed a series of alleged shortcomings in its content.

These shortcomings included coverage of transgender issues, the war in Gaza, and Trump’s presidency.

The most serious accusation was the claim that footage on the Panorama program was selectively edited to falsely imply that the US president told his supporters in January 2021, “We’re going to walk down to the Capitol, and I’ll be there with you, we fight. We fight like hell.”

In fact, these words were taken from different parts of a speech delivered nearly an hour apart, and the section where Trump told his supporters to “peacefully and patriotically make your voices heard” was omitted.

The BBC has long faced accusations from all political sides that it does not comply with its governing charter, which states it must not “prefer one side over another.” But on Monday, BBC Chairman Samir Shah issued an apology, publicly apologizing for the “wrong decision.”

The broadcaster’s new charter is being negotiated

Under its Royal Charter agreement, the BBC is funded by a license fee that every household watching or recording television or watching BBC iPlayer must pay.

The current Charter began in 2017 and is valid until December 31, 2027. Negotiations are still in the early stages, but people familiar with the talks say that funding issues will dominate the agenda at a time when ministers are raising taxes.

Culture Secretary Lisa Nandy, who is managing the renewal of the Charter, said in January that she was thinking “quite radically” about alternatives to the license fee and was not ruling out a subscription model.

Farage, a long-time critic of the BBC license fee, said that millions would “refuse” to pay if the broadcaster did not “get its act together.”

The White House gives open support to Farage’s new channel

Farage is also a prominent figure in the commercial broadcasting sector as a star presenter for the right-leaning GB News. Trump’s press secretary, Karoline Leavitt, expressed support for the newly established channel in a post on X, stating, “@BBCNews is dying for pushing anti-Trump fake news. Everyone should watch @GBNEWS!”

Conservative Shadow Culture Secretary Nigel Huddleston warned, “The BBC should pay very close attention to why more and more people do not want to pay the license fee, because they either feel they are not getting value for money or they disagree with the content.”

But former Conservative culture secretary John Whittingdale, who was involved in the last Charter negotiations, argued that funding is “a completely separate discussion.”

“The issue of how you pay for the BBC should be kept completely separate from editorial matters, because the independence of the BBC is still a very important principle,” Whittingdale said.

The Prime Minister’s Office tried to temper the debate by emphasizing that it does not believe the BBC is institutionally biased, pointing to the broadcaster’s “vital role” in an age of disinformation.

Conservatives issue a “soft power” reminder

Both Conservatives and Reform UK insist they have no intention of destroying the BBC.

“The BBC has a future because it has a strong global brand, but to maintain its credibility and reputation, it must adhere to the principle of impartiality and ensure that its news and current affairs programs comply with its own editorial guidelines,” Huddleston said on Monday.

One of the key arguments put forward by the BBC’s defenders in favor of its funding is the “soft power” role it plays through initiatives like the BBC World Service, which provides news in more than 40 languages. However, the BBC has made layoffs this year to achieve savings.

Conservative MP Julian Smith said it was unfortunate that BBC management teams had been focused on internal scandals and editorial and corporate issues that needed to be handled much more quickly, rigorously, and with political confidence and understanding.

“This has led to a loss of focus on how to provide the most benefit to the government and, where necessary, how to defend the BBC’s global reach and its potential impact on foreign soft power,” Smith said.

Whittingdale described the BBC as an “extraordinarily good broadcaster,” adding, “We need the BBC.”

Who is behind the “internal coup” at the BBC?

Meanwhile, it is alleged that a figure with connections to the Conservative Party on the BBC board played a significant role in the resignations of the two executives.

According to a report in The Guardian, this person is Robbie Gibb, a former adviser to the Conservatives. Gibb voiced his criticisms of the BBC’s coverage of Donald Trump, Gaza, and trans rights in internal board meetings held before the resignations of Davie and Turness.

Sources told the newspaper that Gibb “led the attack” in two BBC board meetings that discussed the memo from Prescott, the former independent external adviser to the BBC’s editorial guidelines and standards committee.

The last of these meetings was last Thursday, three days before Davie and Turness announced their resignations from their posts at the BBC amid escalating controversy over Prescott’s “bias” allegations.

The dramatic collapse at the top of the BBC has sparked angry reactions within the institution. A source told The Guardian, “Without a doubt, this was a coup.”

BBC media correspondent Katie Razzall and one of its most prominent political presenters, Nick Robinson, said there was a disagreement with the board, with news executives wanting to issue an apology, but the board prevented it.