BBC Backs-Off Sale of £2bn Commercial Unit

14 October 2004

Britain's state-owned broadcaster the BBC, on Wednesday executed a U-turn over the mooted sale of its commercial arm BBC Worldwide, which has been valued at up to £2 billion ($3.58bn; €2.92bn).

The announcement was greeted with derision by some of the BBC's profit-motivated rivals, who dismissed the corporation's exploration of a sale as mere posturing to dupe the government into believing it had heeded rivals' complaints of unfair competition.

The existence of the highly profitable BBCW is something of a public service red rag to a commercial bull. The latter complains that its activities violate the BBC's remit and compete unfairly with private sector companies.

But the reaction among BBC staff and executives – particularly within the Worldwide unit – was one of relief. John Smith, the corporation's chief operating officer/finance director, responsible for conducting the review, broke the news to a meeting of some four hundred senior managers, telling them the unit is "not for sale" at the present time.

The review process – cosmetic or otherwise – will not have come cheap. The BBC hired a roster of four investment banks – Rothschild, Deutsche Bank, Morgan Stanley and CIBC of Canada – to conduct a study into the sale of the offshoot.

Among the unit's assets are BBC America, BBC Prime channels, twenty-six magazine titles, book publishing, merchandising ventures and an overseas programmes sales business. A number of multinational media corporations, including Disney, had expressed interest.

Data sourced from Wall Street Journal Online; additional content by WARC staff