BBC must curb Worldwide activity
The BBC has been given blunt instructions to curb some of its commercial activities. The powerful all-party Parliamentary Culture, Media & Sport Committee says some of BBC Worldwide’s activities are not linked to broadcasting and have thus created an “adverse impact on its commercial competitors”.
Last year BBC Worldwide declared record profits of £118m. But now MPs have called for closer policing of Worldwide’s deals by the BBC Trust, the corporation's governers. The MPs says the current £50m threshold at which a commercial transaction is referred to the BBC Trust is too high and should be lowered to £30m in order to allow the BBC Trust closer scrutiny and control over the BBC's commercial decisions.
The MPs were also critical of John Smith, BBC Worldwide’s CEO, saying that he should step down from the BBC Executive Board. Such a move, said the committee, would deliver a more transparent, regularised and arm’s-length commercial relationship between the BBC as broadcaster and BBC Worldwide as its commercial arm.
John Whittingdale, chairman of the committee said: "There is a balance to be drawn between generating a return for the BBC and preventing damage to its commercial competitors. We believe that the balance has tipped too far in favour of BBC Worldwide's expansion and we look to the BBC Trust to correct this."
Additionally, the report was highly critical of BBC Worldwide's acquisition last year of the travel book group Lonely Planet. The committee said the BBC failed to meet the level of Stock Exchange disclosure requirements that would apply to any listed firm, when it bought Lonely Planet in 2007. Neither the BBC nor Lonely Planet are publicly listed, but the MPs suggest that similar transparency is needed in all dealings by BBC Worldwide. The BBC Trust said it was reviewing the role of BBC Worldwide and already had most of the issues raised in hand.