Venture capital groups are limbering up to bid for the BBC’s commercial operations if the sale is given the green light by the Corporation’s chief executive, Mark Thompson.
According to reports over the weekend, Rupert Gavin, who quit this month as chief executive of BBC Worldwide and Roger Flynn former chief executive of BBC Ventures, are believed to be at the top of the list to head bids by venture capital groups, which could raise over £1 billion for the BBC.
Private equity firms, Candover, Cinvent and 3i are rumoured to be already working on plans to make offers for any operations put on the block.
Last month Thompson unveiled an ambitious plan to reduce operating costs at the BBC by more than £100 million next year and reports suggested that sale of the BBC’s commercial arms which include BBC Worldwide – the overseas channels and programme sales operation and magazine publishing & licensing – such as the Radio Times, may be put under the hammer (see BBC Plans Radical £100 Million Cost Reductions).
The aim of the sell-off would allow the Corporation to invest more of its £2.68 billion licence fee income in making programmes rather than servicing the running costs of an organisation employing 28,000 people. A small team of managers overseen by John Smith, BBC finance director and chief operating officer, is reviewing the future of commercial operations and is expected to reach its conclusion by the end of this year.
Officially, Thompson, has committed to cutting overheads from 12% to 10% of its total expenditure over the period of its next 10 year charter which is due to begin in 2007.
Last year, BBC Worldwide made profits of £37 million on sales of £657 million and returned £141 million in cash to the BBC.
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