The BBC is reportedly in talks with Channel 4 to launch a £500 million joint bid to take control of multi-channel broadcaster UKTV. Reports had emerged at the end of May 2018 that fellow PSB ITV was a likely partner in such a buy out.
UKTV has a mix of 10 free to air and pay-TV channels as well as a free catch-up streaming service. BBC Worldwide, the financial arm of the BBC, already owns 50 per cent of the company, with the remaining stake controlled by US media giant Discovery.
The BBC does not have the financial clout to buy out Discovery and has thus been seeking a partner. Channel 4 has £190 million in cash reserves which it could use as part of any takeover bid for UKTV.
BBC Worldwide wants control of UKTV because it is the biggest driver of its profits and source of funds it feeds back to the licence fee-funded BBC each year.
UKTV’s profits have soared from £29 million to over £90 million in the last eight years. Much of UKTV’s content is BBC archive content, and it currently pays £54 million a year for the rights to an extensive shows such Top Gear, Blackadder, QI and Dad’s Army.
UKTV is also of strategic importance to Channel 4 as it handles the £225 million-a-year TV ad sales contract for the commercial broadcaster, reports The Guardian. A tie-up would would provide Alex Mahon, Channel 4’s new chief executive, with instant exposure to a new revenue stream in the pay-TV market.
Discovery inherited UKTV when it acquired Scripps last year.