BBC to Sell Technology Subsidiary

BBC is selling its subsidiary BBC Technology Ltd. following a review that showed that the British broadcaster would save $35-52 million annually if its technology services were outsourced. The sale also prompted the resignation of Roger Flynn, chief executive of BBC Ventures Group, which comprises BBC Technology, BBC Broadcast, BBC Resources and BBC Vecta.

BBC Technology was created in 2001 to save money and generate third party revenue for BBC through its contract for technology services. BBC Director-General Greg Dyke said when the company was given its current funding agreement in 2000 by then Secretary of State for Culture, Media and Sport Chris Smith, it was on the condition that BBC raised an additional $1billion over the next seven years. Smith suggested the sale of a BBC asset as a way of meeting that obligation. "That is what is now planned," said Dyke.

The review further concluded that the BBC should conduct a European Union (EU) procurement process where the winner would buy BBC Technology and take on its currently employed staff of 1,400. By combining the procurement process with the sale, which is subject to the approval of the Secretary of State for Culture, Media and Sport, BBC can leverage maximum value and invest more money in its programs and services. The staff at BBC Technology hopes the sale will provide growth opportunities by attracting bids from major technology firms. Dyke expects "to receive a significant sum of cash for the business."

An internal review carried out by BBC Technology concluded that for the subsidiary to be competitive, further rationalization would be needed, which would have resulted in substantial job losses. BBC has no plans to see any other commercial subsidiaries.