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BBC says Ofcom proposals illegal

Lyons questions plans for Channel 4 funding

LONDON — The BBC has accused the U.K. media regulator Ofcom of effectively breaking the law by suggesting that the assets of its commercial arm, BBC Worldwide, should be transferred to Channel 4.

BBC Trust chairman Michael Lyons, speaking to the Broadcasting Press Guild today (Oct. 15), said that Ofcom had failed to take into consideration the legal status of Worldwide when it proposed that Channel 4 might be given a share of Worldwide’s profits.

“I question the thinking behind a proposal to gift BBC Worldwide to Channel 4,” said Lyons.

“Put aside for a moment whether this is actually legal, state aid issues, and the merits of removing £100 million ($175 million) a year of dividends back to the public via new BBC programs.

“In what way might this make business sense for BBC Worldwide or Channel 4?

“I can see there could be some commercial deals that Channel 4 and Worldwide could do to the benefit of both, but Worldwide primarily exists to exploit the secondary rights of BBC public service programs, not Channel 4.

“And besides Worldwide belongs to licence fee payers not Ofcom and not the Government either.”

The BBC topper’s remarks are likely to infuriate Ofcom and Channel 4, which claims it needs a public subsidy of at least $175 million a year if it is to survive as a public service broadcaster.

One option under consideration by Ofcom is to share the BBC licence fee – which generates more than £3 billion ($5.25 billion) a year – with Channel 4, so-called ‘top slicing’.

But Lyons said that “the prospect of ‘top-slicing’ has receded dramatically.”

Rather than campaign for state coin, the BBC Trust chairman said that Channel 4 should scale back its ambitions and engage in constructive discussions with the Beeb over partnerships that should help it operate more efficiently.

Lyons welcomed Channel 4’s recent decision to abandon its plans to launch a radio service to rival the BBC’s and reckoned that it could also save money by reducing its multi-platform ambitions.