The House of Lords communications committee were informed by John Smith, the chief executive of BBC Worldwide, that a proposed commercial partnership between BBC Worldwide and Channel 4 would generate annual turnover of £800 million (approx R9,600m) and a profit of £200 million (R2,400m). The partnership deal would include the corporation’s commercial arm’s UK assets, including its 50% stake in the UKTV pay-TV channels business and its 60% stake in DVD business 2Entertain. Also on the cards is the purchase by BBC/Channel 4 of the remaining stakes in the two businesses from their current owners.
"If you form the venture with Channel 4 which would include these stakes, the effect on Worldwide is not that significant from a turnover point of view. The effect is much more substantial for Channel 4 as they get the benefit of 50 per cent of the turnover. On top of that, both organisations would get 50 per cent of the synergies,” said Smith
In other words, the deal would mean the corporation and Channel 4 would each hold 50 per cent of the new venture, receiving half each of the estimated £200 million annual profits.
Andy Duncan of Channel 4 said: "We are agreed on all the things that would really matter. There is not much fundamental disagreement, just a few things we haven’t run to ground." Elsewhere it emerged one of those things is that the BBC wants C4 to relinquish any future claims over license fee money, something C4 has said it will not do.
The agreement is expected to be signed within weeks.