BBC Worldwide to be kept on short leash

BBC Worldwide

The BBC has been told that it needs to keep BBC Worldwide on a short leash, as it's found itself in trouble with internal regulators over its activities. The corporation is in the spotlight over its commercial arm, BBC Worldwide, after competitors complained that there was an unfair advantage due to the corporation's huge financial muscle.

Presenting a report on the commercial activities of the corporation, Sir Michael Lyons, chairman of the BBC Trust, said Worldwide would be banned from mergers and acquisitions, apart from in exceptional circumstances, and would be forced to sell off any of its operations that were not "in keeping with the BBC brand."

Lonely Planet

The corporation has faced heavy criticism over its 2007 acquisition of Lonely Planet, the guidebook publisher, for GBP£90 million. Rivals claim it was entering a market that had little relation to the corporation's core purposes.

Although the report stopped short of ordering Worldwide, which has a turnover in excess of GBP£1 billion, to sell the publisher, Sir Michael said, "The trust would not expect to consider a commercial deal of the scale and nature of the Lonely Planet acquisition in future."

The trust ordered that Worldwide should become a "more internationally facing business" that would undertake fewer activities in the UK, where the recession has accentuated its size and strength compared to other commercial rivals.

International channels

The review also ordered Worldwide to sell off its stakes in non-BBC branded international channels, such as Animal Planet, if it could secure a good return, the British paper The Times reports.

Sir Michael said, "Worldwide is a successful business which brings both significant financial benefits for the licence fee payer and a tangible boost to the creative economy. But the trust and the executive both acknowledge that the boundaries for Worldwide activity need to be clearer.

"Our commercial operations are not exempt from the BBC's public mission. They must keep the public purposes at their heart, engaging carefully with markets globally to help ‘bring the UK to the world and the world to the UK', whilst protecting and promoting the BBC's brand and reputation.

"We're satisfied that these changes will provide much-needed clarity and a greater alignment with the BBC's public purposes, without stifling Worldwide's ability to perform as a thriving and profitable entity."

Virgin Media

Despite the ban imposed by the BBC Trust on mergers and acquisitions, BBC will be allowed to acquire Virgin Media's 50 percent stake in pay-TV joint ventureUKTV, to help secure the financial future of Channel 4, the British newspaper The Guardian reports.

Lyons said that the BBC Trust had explicitly left a clause in the revised remit to allow Worldwide to strike deals when a case of "exceptional circumstances" could be made.

He said that the possibility of a deal to acquire the 50 percent of UKTV that BBC Worldwide does not already own as part of a partnership with Channel 4 to help the broadcaster bridge a potential GBP£100 million a year funding gap would meet that criterion.

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