BBC, Discovery break up UKTV channel mix
Details
Joseph O'Halloran
| 02 April 2019

Less than two years after Discovery acquired the half share in the British TV service to match that of the BBC Studios, UKTV’s current format is to be broken up among its partners.

Under the terms of a 10-year content partnership deal — effective in all territories outside the UK, Ireland and Greater China — which is expected to complete in late Spring 2019, Discovery will take full ownership of UKTV’s lifestyle channels and BBC Studios will gain UKTV’s entertainment channels.

That will see Discovery will take control of channels such as Good Food, Home and Really. Discovery has an existing portfolio of 16 channels in the UK including Discovery Channel, TLC, ID, Animal Planet, Eurosport, Quest and Quest Red and the Quest OD video-on-demand service.

Discovery will also be exclusive global home of BBC landmark natural history programmes in SVOD, including the Planet Earth, Blue Planet and Life collection of titles, the recently lauded Dynasties and others, as well as future BBC-commissioned landmark series from BBC Studios, following their linear transmission. It also acquires SVOD rights to hundreds of hours of BBC programming across factual genres.

All of this content will form one of the pillars of a new global streaming service, which will also include some of the best of Discovery’s programming library, original content created for the service, and experiences and offerings that go well beyond video. The service will launch by 2020 and will form a key part of Discovery’s new portfolio of direct-to-consumer services which will also be made available to distribution partners for retail.

For its part, BBC Studios will acquire the remaining seven channels — Alibi, Drama, Eden, Gold, Yesterday, W and the core entertainment channel Dave — along with digital player UKTV Play, and the UKTV brand. These channels are said to be most closely aligned to the BBC’s own content strategy and supply, with BBC programmes currently delivering around half the viewing for these seven channels, and accounting for around 95% of BBC Studios’ current content on UKTV.

As part of the UKTV agreement, BBC Studios will make payments totalling £173 million to Discovery. This includes a balancing payment in relation to the channels acquisition and the assumption of £70 million of debt, currently financed by Discovery. Discovery will also receive at least an additional £10 million from UKTV, as the parties will share the existing cash on the company’s balance sheet, reflecting outstanding dividend, and other ancillary value transfers to Discovery through the transaction.

Once the deal is complete, the entertainment channels will continue to operate under the UKTV brand out of UKTV’s offices and BBC Studios will look to grow investment into UK programming, including original content, for the channels it will own.

Discovery and BBC Studios have also signed a bespoke development deal to create new landmark factual content for Discovery for both linear and digital distribution. The two companies have already worked together on natural history series such as Planet Earth, Walking with Dinosaurs, Life and Blue Planet. They will also co-fund a dedicated development team within BBC Studios. BBC Studios and Discovery have also agreed to a short-term programme licensing agreement for the supply of BBC Studios lifestyle content to Discovery’s UKTV channels in the UK.