Report says to avoid mergers, acquistions

BBC Worldwide must concentrate on selling programs and avoid mergers and acquisitions unless there are exceptional circumstances.

These are among the main conclusions of an 18-month study examining the activities of the pubcaster’s commercial arm by in-house regulator the BBC Trust.

It wants Worldwide to earn two-thirds of total revenue from outside the U.K. within five years, chiefly from program sales and channel distribution.

At present Worldwide earns around half its revenue overseas.

Trust chairman Michael Lyons warned that in future deals like the controversial £89 million ($147 million) purchase of travel book publisher Lonely Planet, made two years ago, would be unacceptable.

Privately funded rivals have accused Worldwide of acting beyond its remit in recent years, and tough economic times have only added to this criticism.

By forcing Worldwide to operate within more strictly defined parameters and concentrate more on international activities, the BBC hopes to silence these critics.

But Lyons said that the possibility of Worldwide buying the 50% it doesn’t already own in paybox UK TV from Virgin Media remains an option as part of attempts to forge a partnership with fellow pubcaster Channel 4.

The idea is that the UK TV channels would operate alongside Channel 4’s own channel brands, such as E4 and Film Four.

“The opportunity to create a structure of lasting value to U.K. public service broadcasting as well as to both individual parties is clear, as long as any deal creates value for both parties rather than transferring it out of BBC Worldwide,” the Trust said.

Further investments in U.K. shingles — Worldwide has minority stakes in Left Bank and Baby Cow — are effectively prohibited.

It may well be that if the market begins to improve, Worldwide could sell these assets along with stakes in non-BBC branded international webs, including Animal Planet, owned jointly with Discovery, if it could get a good price

The review also announced a shift in policy that could affect the schedules of BBC-branded channels overseas, including BBC America, where third-party content, such as edgy teen drama “Skins,” forms part of the mix.

In future they must ensure that all content reflects the BBC’s “high brand and editorial standards.”

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