BBC Worldwide, the corporation’s commercial arm, should be forced to pay as £60 million (E69m) a year for the right to use the BBC brand, according to Pact, the independent producers’ trade body. Pact is also calling for BBC Worldwide to lose its preferential status in bidding for rights to the corporation’s programming, in a report commissioned from research consultancy Oliver & Ohlbaum Associates.
BBC Worldwide gains huge commercial benefits by avoiding the usual business practice of paying an annual licence fee for use of the valuable BBC brand, according to the report. The report examines the structure of the deals to licence the use of the Virgin Media and Virgin Radio brands. Each deal is structured on the basis of paying an annual fee relating to revenues earned.
The report points out that the effect of an annual licence payment would be to reduce BBC Worldwide’s value to any buyer by around 39 per cent.
Pact is also seeking to scrap BBC Worldwide’s “first look” and “last look” arrangement with the public service arm of the corporation when bidding for programming rights. The commercial arm gets the chance to put in the first and last bids in this process.