Sale Of BBC Worldwide Raises Issues Over Rights
The proposed £1 billion sale of the BBC’s commercial arm, BBC Worldwide, has generated a flurry of interest from commercial broadcasters, venture capital groups and investment banks.
However, it is understood that some would-be buyers are being put off by confusion over the lucrative rights to successful BBC shows and products, such as The Office or Fimbles, which could prove to be potential deal breakers.
Confirmation that the BBC is considering selling off its commercial arm prompted interest from all quarters. Private equity firms, Candover, Cinven and 3i, are already rumoured to be working on plans to make an offer for BBC Worldwide, which is the UK’s leading exporter of television programmes (see Buyers Prepare To Snap Up BBC Commercial Arms).
A wide-ranging review being headed by the BBC’s finance director, John Smith, has put three options on the table for BBC Worldwide. It could sell the division as a going concern, break it up and sell parts of it, or maintain the status quo.
However, a senior source at a major private equity group told The Business that confusion over the transfer of intellectual property rights after a sale made it difficult to estimate the value of the deal and could put off some bidders.
Divesting such a big part of a public service broadcaster into the commercial sector is relatively untested. Potential buyers are reportedly concerned about the shelf life of brands linked to BBC programmes and services after these are cancelled.
The sell-off of BBC Worldwide 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. Last year BBC Worldwide made profits of £37 million on sales of £657 million and returned £141 million in cash to the BBC (see Buyers Prepare To Snap Up BBC Commercial Arms).
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