Digital Spy

Search Digital Spy

Media News

BBC urged to part-privatise BBC Worldwide

By
BBC urged to part-privatise BBC Worldwide
The BBC should part-privatise BBC Worldwide to turn the commercial body into a powerful global distributor for British content, a new report has claimed.

Published today, a House of Lords consultation on the UK film and television industries calls on ministers to force through a sale or partial sale of Worldwide, which has an annual turnover of £1bn.

The 102-page report, compiled by a communications committee chaired by Lord Fowler, follows a recent inclusion of the BBC's commercial arm on a list of government assets for potential sale.

Worldwide has previously attracted controversy for the speed and scale of its growth, particularly in terms of its impact on commercial market rivals.

The organisation received heavy criticism following an £89m deal in 2007 to acquire a 75% controlling stake in Lonely Planet, which Sky chairman James Murdoch recently described as tantamount to a "nationalisation" of the travel guide publisher.

In response, the BBC Trust ruled that Worldwide could retain Lonely Planet, but must reign in any future acquisitions of such scale to avoid reputational damage for the corporation.

The BBC Executive has remained publicly steadfast in its opposition to any sale of Worldwide, but insider reports suggest that partial flotation talks have already been held with banks in the City.

Last September, BBC director general Mark Thompson admitted that a partial sale of Worldwide was among options being considered in his strategic review of the corporation, which will be published next month.

The Lords committee report believes that a part-privatisation of Worldwide would enable it to sell British programming from independent producers and other broadcasters around the world. The report claims that this would generate extra profits and also new job opportunities for the UK economy.

"We believe that such a company, with a continuing link to the BBC, would be capable of becoming a major global brand for distributing UK content, producing additional profits, employment and opportunities for British production companies," the report said.

However, the committee accepted that the Trust has historically been "either dismissive or lukewarm to the idea of a public private partnership".

A Trust spokesman said: "If we saw fit to implement any changes in the future, our priorities would be to ensure the BBC's brand and reputation was protected and to secure the best value for licence fee payers from the BBC's intellectual property."

Lord Fowler, a former Tory cabinet minister, claimed that a partially privatised Worldwide could be an engine for driving British-owned brands around the world.

"BBC Worldwide has been immensely successful in developing the commercial income of the BBC and now has a revenue of around £1bn a year," he said.

"All the evidence suggests that there is further scope to expand but to do this will require private capital. It cannot be achieved by using the licence fee.

"A company with private investment but retaining a BBC shareholding could achieve both bigger profits and also major proceeds from the sale."

Despite Channel 4's long-held hope to agree a joint venture deal with Worldwide to boost its beleaguered balance sheet, an agreement has always proved out of reach.

In the report, Lord Fowler's committee also criticised the government for "failing to understand" the value held in the BBC, ITV and Channel 4 joint venture Project Kangaroo, which aimed to create a technical standard for video on-demand products.

The committee said that the Competition Commission's decision to block the venture resulted in potential lost revenue opportunities for UK producers, while also leaving the market open for US players. Lord Fowler called on ministers to ensure that "similar mistakes [are] not made in the future".

All Kangaroo assets were subsequently acquired by transmissions firm Arqiva to underpin its forthcoming commercial VOD service, SeeSaw.

You May Like