British regulator Ofcom will not conduct a formal investigation into the BBC’s deal with Discovery to divide up UKTV.
This effectively means that the proposed deal – that will see Discovery take control of three channels and the BBC take control of seven – now has official approval.
Discovery, which became a co-owner of UKTV when it acquired Scripps in 2018, will retain Good Food, Home and Really. Discovery UK chief James Gibbons will oversee the channels.
BBC Studios has acquired W, Alibi, Dave, Drama, Eden, Gold, Yesterday and digital service UKTV Play. The channels fit into BBC’s existing portfolio, with many of them primarily showing re-runs of old BBC programming. Marcus Arthur, president of UK, Ireland & ANZ for BBC Studios Distribution will become CEO of UKTV.
In making the decision, Ofcom concluded that there was no “potential market distortion” in the deal.
A statement from Ofcom said: “We considered potential competition issues, including if public service content was supplied directly to UKTV below market rates, and the risk of UKTV profits being used to subsidise other commercial activities that are not earning a commercial rate of return over an appropriate period. However, we are confident that our trading and separation regulation sufficiently safeguards against any potential market distortion or unfair competitive advantage arising as a result of the UKTV deal.”
The BBC will pay £173 million (€201 million) to Discovery, which includes a balancing payment and the assumption of £70 million (€81 million) of debt.
UKTV will transfer £10 million (€11.6 million) to Discovery as the parties share the existing cash on its balance sheet.