BBC Worldwide at Centre of Broadcast Tug-of-Love

15 December 2008

LONDON: The UK government is considering merging state-owned but commercially funded broadcaster Channel 4 with BBC Worldwide to ease the former's financial woes, a move the BBC fruitlessly attempted to counter by offering its rival a £40 million "rescue package".

As part of the proposed 4 Worldwide merger, Channel 4 would run BBC Worldwide, which sells the Corporation's content around the world, and is also the UK's third largest consumer magazines publisher.

The BBC would retain a minority stake in the organisation, which made a profit of £112.5m in 2007.

Channel 4 argues that it needs an extra £150m in annual funding, without which it could face bankruptcy in five years, while UK communications regulator Ofcom estimates a lower figure of between £50m and £100m.

Meantime, the the BBC offered a £40m package to help Channel 4, including publishing the magazines spun off from its programmes, but the latter spurned the offer, saying it was worth just £15m.

BBC Trust chairman Sir Michael Lyons dismissed the proposed merger, arguing that it would not solve the major issues facing the UK broadcast sector. 

"The danger is that this proposal would be massively distracting from the issues in hand. The value of Worldwide rests on its relationship with the BBC. If that is severed, its value will be reduced."

Data sourced from The Times (UK); additional content by WARC staff