Profit down at BBC Worldwide post-AMC deal

Profit and revenue have declined at BBC Worldwide in the wake of the sale of a chunk of the BBC America cable channel.

The absence of a chunk of revenue from BBC America, 49.9% of which was sold to AMC for US$200 million earlier this year, caused the year-on-year revenue and profit reverses the commercial arm of the BBC said this morning.

Headline 2014/15 revenues of £1 billion (US$1.56 billion) were down 3.9% and headline profit decreased 11.9%, taking the annual total to £138.6 million. Worldwide said the declines were caused by the absence of BBC America revenues for most of the second half of the year.

Comparing like for like revenues across its ongoing operations, it said there was a 0.4% increase in the £948 million recorded, and a 4.1% hike in profit of £127.1 million. Digital sales, advertising revenue across its channels and the contribution of UKTV were cited as key drivers.

BBC Worldwide CEO Tim Davie said the AMC-BBC America deal “significantly enhanced future prospects for our BBC America channel, while also enabling us to boost shareholder returns for the year”.

The proceeds of the AMC deal helped Worldwide generate a record amount of cash for the BBC, with an annual increase of 30.3%, taking the return to the Corporation to £226.5 million. Worldwide also contributed a greater amount in commissioning spend, becoming a production or distribution partner on various BBC shows, and in turn funding, or deficit-funding, a chunk of their budget.

Reacting to the 2014/15 annual report, which was published today, BBC director general Tony Hall (pictured left, above) said it was a year of “positive progress at BBC Worldwide” against a “backdrop of market transformation that presented some challenges”.

Hailing Worldwide the most successful commercial arm of any pubcaster in the world, he added that the Corporation wants it to return a cumulative £1 billion across the next five years.

“Although commercial returns are a small part of the BBC’s funding mix, we are nonetheless determined to maximise their impact,” Hall said. “Therefore, looking ahead to the next phase of the BBC’s development, and a new charter period, it is the board’s aim to sustain annual financial returns at around this new level, even without the one-off benefit of BBC America proceeds.

“We are therefore looking to 
BBC Worldwide to generate around £1 billion in returns for the Corporation in the five years starting from 2014/15 – an increase of almost one quarter on the previous half-decade.”

Tim Davie (right) said that the business had “taken steps to drive innovation and underpin the sustainability” in the 2014/15 reporting period including investing in indies and relaunching its channel offering. “This is essential work in the context of a global media market undergoing structural and systemic changes, some of which constrain our trading and outlook in certain areas,” he said.

In its last report, Worldwide reported a downturn in US sales. In its latest annual update said digital sales eclipsed linear for the first time in North America. Overall regional sales were £299.9 million compared to £342.5 million a year earlier. Profit was £32.9 million against £44.3 million across the same period.

In the UK, headline 2014/2015 sales were £361.8 million compared with £362.2 million a year earlier and profit was £52.7 million against £56.2 million.

There was growth in terms of Worldwide’s Australia and New Zealand business with 2014/15 revenues of £81.9 million compared to £76 million in 2013/14. Profit was £16.3 million against £13.3 million a year earlier.