The British government could force BBC Worldwide to sell its 50% in multichannel operator UKTV, which has been a vital cash cow for the BBC’s commercial operation.
The culture department of the Conservative government has considered forcing a sale various times in the past two years, and according to the Telegraph, it has now revisited the idea, and may make a recommendation in an upcoming DCMS white paper on the BBC’s future that’s released next month.
John Whittingdale, the culture secretary, is “keen” to see a deal, potentially worth £500 million (US$710 million) pushed through, according to the Telegraph, which didn’t reveal its sources.
The BBC and Whittingdale have clashed in the last week after the pubcaster’s Panorama current affairs show revealed details of the minister’s relationship with a sex worker.
UKTV’s other co-owner, US-based broadcast group Scripps Networks Interactive, is known to be keen to take full control of the broadcaster, whose combined ratings share now surpasses the Sky and Channel 5 channel groups.
Scripps has previously had a £500 million offer for the 50% stake rejected, with BBCWW increasingly reliant on the revenues UKTV pulls in.
UKTV accounts from last week revealed the broadcaster, whose networks include W and Dave, gave BBCWW a third of its profits last year.
UKTV posted profit of £82 million and £319 million in revenues. BBCWW posted profits of £226.5 million in its latest yearly financial results.
Various content agreements would be under scrutiny should the BBC exit the UKTV business. UKTV CEO Darren Childs told the Telegraph that BBC content was “the backbone of this business since it started and it continues to be a massive part of what we do”.
“There are lots of things up for debate that could have a material impact on the entire sector. I think we’ll wait for the white paper to come out,” he added.
“While the BBC has not seen any drafts of the White Paper, these proposals do not reflect the discussions we have had with Government on its content,” said a BBC spokesperson.
There are also suggestions Whittingdale plans to top-slice £100 million off of the BBC’s budget to allow indies and to produce more children’s programming and local news for the pubcaster.
Last year, Whittingdale forced the BBC to take on costs for over-75s’ licence fees, which is likely to cost £600 million.
The Department of Culture, Media and Sport could not to contacted, while UKTV had no comment.
The BBC has co-owned UKTV since its inception in 1992.