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Gavin: BBC shift is not causing rift

Ask about 'excessive overheads,' topper suggests

LONDON — Rupert Gavin, BBC Worldwide’s chief exec, would like it known that he is not at war with his boss, BBC director general Greg Dyke.

Some say Dyke wants to reshape BBC Worldwide into a much leaner machine.

Perhaps ominously, the bureaucracy-slashing Dyke recently advised Variety with typical off-the-cuff candor to query Gavin about BBC Worldwide’s “excessive overheads.”

Dyke views BBC Worldwide’s structure as too complex. Some pieces, such as the magazine business, could be sold. To date, Gavin’s strategy has favored partnerships over disposals.

But the government has mandated that the director general save $1.6 billion in return for an increase to the annual BBC license fee, and he is looking for ways to save money beyond the budget cuts he has already instituted.

BBC Worldwide is an obvious target.

Gavin insists, however, that he and Dyke are like-minded on most issues.

“We’re not at odds at all,” he says. “The review is complex. A lot of this is made tough because we are on a significant growth trajectory. We’re going through a perfectly normal process of how you take a business forward.”

Gavin and Dyke should be complementary creatures — both come from the commercial sector and are independently wealthy.

Gavin is the savvy ex-British Telecom exec straddling the BBC’s public service remit and commercial ambitions; Dyke is the self-made millionaire and former head of Pearson Television turned reforming director general.

But despite Gavin’s protestations, that affinity could be a problem. Perhaps Gavin is being stalked by a commercial animal even more ferocious than himself.

BBC Worldwide oversees all of the BBC’s nonpublic service activities — programming sales, joint ventures, the Internet, merchandising and publishing. Sales exceeded $750 million last year, and $116 million was returned to fund programming.

A least one BBC source concurs that there is “no great battle between Dyke and Gavin.”

The most contentious idea making the rounds is selling off 49% of BBC Worldwide — a quick fix to Dyke’s cost-cutting problems.

Gavin views such a move as illogical. A partner on that scale would have to mirror Worldwide’s diverse interests to be a suitable ally. “There are very few companies with a full range of complementary skills,” Gavin says.

But a selloff cannot be discounted. Such a move was originally proposed by Goldman Sachs economist and government adviser Gavin Davis two years ago. Notably, Davis has since become vice chairman of the BBC.

What will happen is a partial float of UKTV, BBC Worldwide’s joint-venture commercial TV channel bouquet with Telewest, the U.K.’s No. 2 cable company. The move, expected later this year, should raise about $300 million for the BBC.

Extending and establishing relationships is another priority. Such a strategy has proven successful in the past.

BBC Worldwide’s joint venture with Discovery, for example, produced the BBC America and Animal Planet TV channels, as well as event series like “Walking With Dinosaurs” and its upcoming $9 million sequel, “Walking With Beasts.”

“We’re building partnerships all the time — that’s a key part of our strategy,” Gavin says. “But it’s always something we have a good deal of caution on.”

The core business remains taking BBC programming to the world.

Dyke is bidding, contingent on government approval, to expand the BBC’s public service broadcasting with four new digital TV channels, including two new children’s webs.

These noncommercial ventures will provide additional programming ammunition for BBC Worldwide. The Beeb’s shows have never been more popular overseas, and top-selling kids fare like “Teletubbies” and “Tweenies” are bread and butter to the division. More kidvid from the mother ship can only be good news.

“It is a significant quantum leap in U.K. production that will create an additional pipeline for us,” Gavin says.

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