BBC Touts Worldwide Assets

08 September 2004

BBC Worldwide, the commercial sales and publishing division of the UK state-owned broadcaster, is possibly on the market as the BBC invites Time Warner, Bertelsmann and Walt Disney for talks.

The price tag on Worldwide, which produced free cashflow of £141 million ($250m; €207m) in 12 months ending March 31, could be a potential £2 billion ($3.55bn; €2.95bn).

BBC America, BBC Prime channels, 26 magazine titles, merchandising ventures and the publicly-funded broadcaster's overseas programmes sales arm are amongst Worldwide's components.

''It's a very interesting set of assets with enormous heritage and an important library of programming. Of course we will look at it'', said one executive, as Time Warner and Disney confirmed they had been invited to talks. The German media group, Bertelsmann, remained tight-lipped.

A government evaluation of the corporation's funding and public service status may be seen as the catalyst to this internal review.

A sales mandate could be reached as the BBC has drawn up a roster of four investment banks - Rothschild, Deutsche Bank, Morgan Stanley and CIBC of Canada – to examine Worldwide.

The top 100 executives of the corporation's commercial sales and publishing division were met yesterday by the BBC's chief operating officer and finance director, John Smith, to outline possible options. A doubling of profits in the mid term, he was told, was achievable as international demand continues to grow for BBC programming and merchandise.

The US Discovery network the UK cable group Telewest have also been invited for discussions as any sale of Worldwide may affect channel partnerships already in existence.

Rupert Gavin, Worldwide's chief executive, who is leaving his post at the BBC this autumn, is himself considering developing the division as an international programming sales and publishing company in its own right, and is formulating a private equity partner fuelled buy-out proposal.

In consultation with rival broadcasters ITV and Channel Four, and publishers such as Emap, results of the BBC's internal review are anticipated by the end of the year, when all bidders will receive an outline of the proposals.

Data sourced from: Financial Times; additional content by WARC staff