BBC takes control of DVD distributor

Worldwide buys remaining stake in 2entertain

BBC Worldwide, the commercial arm of the U.K. pubcaster, is to pay £17 million ($25 million) to secure full ownership of DVD distributor 2entertain, the highly profitable company that produces home entertainment products of hit BBC shows including “Top Gear” and “Doctor Who.”

The deal, announced Thursday, is for the 40% of 2entertain stock it did not already own, bought from the administrators of failed retain store chain Woolworths.

The store’s administrators had been in protracted talks on the sale with BBC Worldwide since Woolworths went into administration in November 2008. The DVD company remained profitable despite the collapse of Woolworths.

The agreement came after a court ruling on the valuation of the 40% stake brought a dispute between the two sides to an end.

BBC Worldwide said it brought to an end “a period of uncertainty, triggered by the collapse of Woolworths, and ensures that consumers can continue to enjoy their favorite BBC titles on DVD and Blu-ray, as well as protecting the investment made by BBC Worldwide in 2entertain over the past six years.”

BBC Worldwide stressed the deal was funded from cash reserves — not by Britain’s public, who pay an annual license fee of $215 to watch television, which is used to pay for the BBC.

John Smith, CEO BBC Worldwide, said the deal was good news for retailers, consumers and license fee payers, who would “continue to benefit from 2entertain’s contribution to BBC Worldwide, which helped us return a total of £153 million ($230 million) to the BBC in the last financial year.”

News of the deal came just two days after Mark Thompson, the BBC’s director general, said that two niche music radio stations, BBC 6 Music and Asian Network, were facing closure.