BBC Seeks New Partner for UKTV Joint Venture

20 December 2005

UK cable operators NTL and Telewest, currently thrashing out the fine print of their merger, may still see their share of the UKTV venture slip through their fingers.

Telewest, which with the publicly-funded BBC jointly owns the ten UKTV channels in a 50/50 split, loses its contractual right to the joint venture if it is taken over by another company.

Eager to retain this lucrative right, the two US-owned cable companies revamped their merger agreement so that Telewest, the smaller partner, will instead acquire NTL - on paper at least. Both assumed the ploy would safeguard the 50% share in the joint venture.

However, reports are circulating that the BBC would, in fact, prefer a new UKTV partnership - possibly with a US broadcaster.

The cable channels, including UKTV Gold and UKTV History, are part of the Flextech content provider, owned by Telewest and subject of sale speculation in the months leading up to confirmation of the merger. [WAMN: 05-Oct-05].

BBC Worldwide has the right to buy Telewest's stake in UKTV in the event of a change of ownership and it appears ceo John Smith's talks with potential US partners are still "alive", despite the latest tweaking of the takeover.

Discovery, Viacom, AOL Time Warner and Sony have all been named in as potential partners. American investment in UKTV could help boost the BBC's global expansion plans, particularly in the US.

However, a number of UK broadcasters including commercial TV channel Five and satellite giant BSkyB, would also like to acquire a stake in UKTV, as well as the rest of Flextech.

Data sourced from Media Week (UK); additional content by WARC staff