BBC Worldwide fights expansion critics

Pols and suits condemn use of public funds

By STEVE CLARKE

The knives are out for BBC Worldwide. A diverse alliance of rival media combos, U.K. producers and politicians are convinced that the Corp's commercial wing has become too predatory.

By the global Beeb arm investing in shingles around the world and buying a 75% stake in backpacker-bible publisher Lonely Planet, Worldwide's critics claim it is acting like any other private company, rather than as the demure division of a public service broadcaster.

"BBC Worldwide is an aggressive and acquisitive organization," opines British pol John Whitingdale.

This month Whitingdale begins a public inquiry to examine whether Worldwide is distorting the market, operating transparently enough and furthering the Corp's public purposes.

He will not be short of witnesses. RTL Group CEO Gerhard Zeiler, normally a cautious speaker, had this to say recently: "I don't think it's 100% in the interest of the license fee payers that they pay for the expansion of BBC Worldwide overseas."

Tim Hincks, CEO of Endemol U.K, which sells shows to the U.K. pubcaster, says: "There's trouble to come because BBC Worldwide is using publicly funded content to compete with British businesses. What is its rationale for investing in indies and inflating prices when there is already a healthy market?"

For sure, the days are long gone when Auntie's commercial cousin was content to devote itself to selling the odd costume drama or natural history skein to overseas broadcasters.

Last summer, Worldwide, led by the dynamic former BBC finance topper John Smith, announced a profit of £118 million ($210 million) -- up 17% -- on sales of £916.3 million ($1.63 billion), a 13% increase on the previous year.

No one doubts that Smith will reach his target of generating £200 million profit from Worldwide by 2012.

Local Worldwide production hubs, including one in L.A., have begun to appear on three continents, and rarely a month goes by without Worldwide announcing another investment in a production company. At last count, the acquisitive unit had bought into shingles in the U.K., Canada, Oz and Argentina. A deal in Russia is imminent.

Is Worldwide intent on global domination at the expense of privately funded rivals?

"The amount of these investments is very modest," insists Worldwide's director of content and production Wayne Garvie. "In fact, some of them are smaller than the sums we'd invest in a landmark factual piece or a high-profile drama. We never take a controlling stake."

But others ask whether it's right to risk public money generated by a license fee paid by all British TV-watching homes.

"We're investing in people and companies with a proven track record," replies Garvie. "Often they approach us because they've either worked with the BBC before or know our reputation. "We're a small team, and we've achieved a fantastic amount in the past two years."

Too much, in the view of some, including John McVay, head of U.K. producers' org PACT.

"BBC Worldwide can't be protected as a public company on the one hand and then let off the leash to be a rapacious and aggressive commercial organization on the other," he complains. "It would appear that Worldwide no longer knows what its boundaries are. It's a question of scope."

But successive U.K. governments have ordered the BBC to maximize Worldwide's revenues. The rationale is that profits can then be returned to the pubcaster's coffers and thus supplement license-fee coin, with British auds reaping the benefit.

That, at least, is the theory.