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From Media Guardian
BBC sells transmission arm for £166m
Chris Tryhorn, City correspondent
Monday June 27, 2005
The BBC today sold its transmission and branding business BBC Broadcast, raising £166m and taking 1,100 people off the corporation's payroll.
Creative Broadcast Services, a subsidiary of Australian bank Macquarie Group, won out in a four-horse race for the division, which had revenues of £109m last year.
The BBC chief operating officer, John Smith, said Macquarie had put in "a great offer" and would grow and invest in the business, which receives 91% of its revenues from the corporation.
But the deal has angered the broadcasting unions, which argued that BBC Broadcast should be retained as an internal asset.
The assistant general secretary of Bectu, Gerry Morrissey, said he would write to the culture secretary, Tessa Jowell, to protest against the deal.
"We believe selling off assets is not in the long-term interest of the BBC," he said. "When the minister approved the creation of BBC Broadcast, she and the management assured us that it was not a prelude to privatisation, so the staff are despondent that this commitment has been broken so quickly."
The successful completion of the deal is still dependent on the approval of the Department of Culture, Media and Sport.
The BBC said Creative Broadcast Services had given assurances on pensions, terms and conditions for BBC Broadcast's staff.
Mr Morrissey said he welcomed the assurances and said Bectu would work constructively to ensure that the business was successful.
But the deal will test the patience of the unions, who staged a one-day walkout in May over plans to cut more than 4,000 jobs at the corporation.
BBC Broadcast - which provides transmission services such as on-air promotions, subtitling and electronic programme guides - was first earmarked for sale in December under a review of commercial activities by the BBC director general, Mark Thompson.
An initial evaluation process of 18 bids whittled down the field to four: Macquarie, private equity group Apax, French electronics group Thomson/Technicolor, and Exponent Private Equity, a UK buyout firm co-founded by former 3i director Tom Sweet-Escott.
Michael Cook, the chief executive of Macquarie Capital Alliance Group, said: "BBC Broadcast has state-of-the-art facilities and services delivered by very talented people and is in a strong position to take advantage of growing opportunities in Europe as well as developing demand from new communication media.
"The BBC Broadcast management team has extensive experience and strong industry relationships across all aspects of the business."
Peter Phillips, the BBC director of business development and head of the sale team for BBC Broadcast, said the sale represented "excellent value for licence fee payers".
In spite of today's deal, the BBC has put plans to sell other parts of its business on ice.
Outside broadcast division BBC Resources, which has 1,300 employees, will remain part of the corporation until at least June 2007, under concessions laid out earlier this month by Mr Thompson.
The BBC began to scale back its commercial activities last year, with the sale of its IT unit BBC Technology to German engineering giant Siemens in July.
Siemens took on the unit's 1,400 staff and later clinched a £2bn 10-year contract providing technology services to the BBC.
The corporation also closed its commercial subsidiary, BBC Vecta, just a year after it was launched under former director general Greg Dyke to exploit the corporation's software and technology innovations.
Plans to sell commercial arm BBC Worldwide were shelved last year, though parts of the business, such as magazines
Quote:
BBC sells transmission arm for £166m
Chris Tryhorn, City correspondent
Monday June 27, 2005
The BBC today sold its transmission and branding business BBC Broadcast, raising £166m and taking 1,100 people off the corporation's payroll.
Creative Broadcast Services, a subsidiary of Australian bank Macquarie Group, won out in a four-horse race for the division, which had revenues of £109m last year.
The BBC chief operating officer, John Smith, said Macquarie had put in "a great offer" and would grow and invest in the business, which receives 91% of its revenues from the corporation.
But the deal has angered the broadcasting unions, which argued that BBC Broadcast should be retained as an internal asset.
The assistant general secretary of Bectu, Gerry Morrissey, said he would write to the culture secretary, Tessa Jowell, to protest against the deal.
"We believe selling off assets is not in the long-term interest of the BBC," he said. "When the minister approved the creation of BBC Broadcast, she and the management assured us that it was not a prelude to privatisation, so the staff are despondent that this commitment has been broken so quickly."
The successful completion of the deal is still dependent on the approval of the Department of Culture, Media and Sport.
The BBC said Creative Broadcast Services had given assurances on pensions, terms and conditions for BBC Broadcast's staff.
Mr Morrissey said he welcomed the assurances and said Bectu would work constructively to ensure that the business was successful.
But the deal will test the patience of the unions, who staged a one-day walkout in May over plans to cut more than 4,000 jobs at the corporation.
BBC Broadcast - which provides transmission services such as on-air promotions, subtitling and electronic programme guides - was first earmarked for sale in December under a review of commercial activities by the BBC director general, Mark Thompson.
An initial evaluation process of 18 bids whittled down the field to four: Macquarie, private equity group Apax, French electronics group Thomson/Technicolor, and Exponent Private Equity, a UK buyout firm co-founded by former 3i director Tom Sweet-Escott.
Michael Cook, the chief executive of Macquarie Capital Alliance Group, said: "BBC Broadcast has state-of-the-art facilities and services delivered by very talented people and is in a strong position to take advantage of growing opportunities in Europe as well as developing demand from new communication media.
"The BBC Broadcast management team has extensive experience and strong industry relationships across all aspects of the business."
Peter Phillips, the BBC director of business development and head of the sale team for BBC Broadcast, said the sale represented "excellent value for licence fee payers".
In spite of today's deal, the BBC has put plans to sell other parts of its business on ice.
Outside broadcast division BBC Resources, which has 1,300 employees, will remain part of the corporation until at least June 2007, under concessions laid out earlier this month by Mr Thompson.
The BBC began to scale back its commercial activities last year, with the sale of its IT unit BBC Technology to German engineering giant Siemens in July.
Siemens took on the unit's 1,400 staff and later clinched a £2bn 10-year contract providing technology services to the BBC.
The corporation also closed its commercial subsidiary, BBC Vecta, just a year after it was launched under former director general Greg Dyke to exploit the corporation's software and technology innovations.
Plans to sell commercial arm BBC Worldwide were shelved last year, though parts of the business, such as magazines