BBC puts flotation of commercial arm back on agenda

LONDON - The BBC is again considering a sale or flotation of part of its commercial arm, BBC Worldwide, which could raise more than £500m.

The BBC's finance director, Zarin Patel, spoke about the possible float to the Sunday Times yesterday, and described the idea as a tempting one.

However, she said it raised issues about control of the BBC brand, which the corporation would not want to hand to a commercial partner.

Earlier this month it was reported that BBC Worldwide had approached private equity firms about teaming up to raise cash in order to fulfil its ambitious acquisition plans.

Treasury rules currently limit BBC Worldwide's annual borrowing to £350m and its chief executive John Smith is understood to see this as restricting its ability to expand.

Last October BBC Worldwide bought a 75% stake in travel guide publisher Lonely Planet and it is said to be interested in acquiring the rights to 'Bob the Builder' from owner Hit Entertainment.

Talk of a possible flotation is seen as only one avenue the BBC will explore for BBC Worldwide. Other options include private equity funding and lobbying the Government to raise its borrowing limit.

BBC Worldwide is valued at more than £2bn and reported record pre-tax profits of £111m last year. It has a target of £200m in profits within five years.

The need to grow revenues from BBC Worldwide comes as the corporation faces a shortfall in its licence fee, forcing it to cut thousands of jobs.

BBC Worldwide makes most of its money from selling the rights and formats to some of the BBC's hit programmes such as 'Strictly Come Dancing' and 'Doctor Who'.

Talk of a possible sale comes as the BBC is accused of breaking its rules and taking sponsorship from soft drinks manufacturer Robinsons.

ITV is reported to have written to Mark Thompson, the BBC director-general, complaining about what is dubbed "advertising by the back door".

The BBC is understood to have made £200,000 from a deal with Robinsons, which was the effective sponsor of the popular BBC Sports Personality of the Year event.

The Britvic brand's logo was frequently seen on screen, plugged by presenter Sue Barker, and mentioned in the coverage on BBC Radio Five Live. The programme was watched by 9.3m viewers.

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