BBC Worldwide profits up 50% from ’04

40,000 hours of programming sold

LONDON — BBC Worldwide, the pubcaster’s commercial arm, announced record profits of £55 million ($99 million) Tuesday, up 50% from last year.

Overall sales increased by 7% to $1.27 billion and cash flow to the BBC increased by $7.2 million to $261 million.

The TV sales business generated best-ever profits of $57 million as some 40,000 hours of programming were sold, including a BBC-produced version of “Strictly Come Dancing,” “Dancing With the Stars,” which has become a hit Stateside in early outings on ABC.

Meanwhile, UKTV, the BBC’s joint channels venture with Flextech, the subject of takeover speculation due to the pending merger between NTL and Telewest (owner of Flextech), delivered its first dividend to the pubcaster to the tune of $3.8 million.

Potential bidders include Viacom and Discovery, but any sale has to be approved by Worldwide.

Other results highlights include 1.3 million units sold of edgy British comedy show “Little Britain”; a new DVD/video joint venture with retailer Woolworths called 2 entertain; and, for the first time, acquiring rights to indie shows commissioned by rival webs ITV, Channel 4 and Five.

“This has been a key year for BBC Worldwide and the company has delivered excellent results,” said Worldwide topper John Smith, who took over from Rupert Gavin in March.

“We have completed a reorganization, made some board changes, begun to develop a new strategy and are now halfway toward doubling profits over 24 months.”

The improved figures may reignite calls to privatize Worldwide. The BBC already is selling off its Resources division — and staff are suspicious that director-general Mark Thompson is keen to sell off other parts.

Last year Smith, who is also the BBC’s chief operating officer, completed a review of Worldwide. Parts of the business, including several magazines, were sold, and Worldwide agreed not to hype remaining BBC magazines on its TV channels.

Following Gavin’s departure, other divisions, including the BBC’s international channels business that includes the underperforming BBC America, have been simplified.

One area Smith needs to address is Worldwide’s once thriving kids business, which lost $11.9 million.

A potential area for concern is new terms of trade for indie producers that enable them to hold onto more of their own rights.

But deputy CEO Mike Phillips said Worldwide had partly countered this by persuading certain indies, including Endemol UK and Hat Trick, to allow Worldwide to sell their shows.

Future areas for expansion include the BBC’s global channel business. Smith aims to launch more international kids channels in addition to the one it already operates in Canada.

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