BBC Outside Broadcasts to be sold to Satellite Information Services

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Saturday, March 8, 2008

Satellite Information Services Limited (SIS), the racecourse television company part-owned by William Hill (19%) and Ladbrokes (23%), has been named by the BBC as the preferred bidder for its Outside Broadcasts division, one of three active businesses within BBC Resources Ltd. Other SIS shareholders include, Thales (Racal) (23%), United Business Media (19%), Racecourse Association (10%) and the Tote (6% - all figures rounded).

SIS Chief Executive David Holdgate would not comment on the terms of the deal, thought to be between £20m and £50m, but said it would be "an ideal acquisition for SIS" and "a perfect fit with our existing SISLink and sports coverage". The company has long-term contracts with other leading broadcasters, such as Sky and ITV and provides satellite links for live sport and news.

In a statement, the BBC said that it intended to exchange contracts and transfer the Outside Broadcasts business and around 300 staff in the near future, with Andrew Thornton, BBC project director for the sale of the division, saying that "SIS offered the BBC a good deal and best value for licence fee payers". Mark Tugwell, Director, BBC Outside Broadcasts, added "it's time for our business to flourish under new ownership, without the constraints of BBC ownership".

The transfer would mean that SIS will be covering major sporting events including the Beijing Olympics for the BBC in August 2008.

BBC Outside Broadcasts

The division — part of the BBC's commercial subsidiary, BBC Resources Ltd — owns a fleet of 15 television production units plus sound, support and communications vehicles (making a total fleet of over 90) and is based in self-contained premises in Langley, three miles north-west of Heathrow. These units cover events ranging from music festivals and state occasions, to Wimbledon and World Cup football.

BBC Studios

On 7th March 2008 the surprise announcement was made that the studio operation — employing around 350 staff at Television Centre and Elstree — would be "retained by the Corporation as a commercial business" after failing to find a buyer.

BBC Post Production

The fate of this third business has yet to be announced with the BBC continuing negotiations with the preferred bidder "understood to be a company based in west London".

BBC Costume and Wigs

Was not included in the privatisation — in early October 2007 it was announced that the business was to close within six months and the entire stock sold as a complete collection. The sale fell through, and on 14th February 2008 the department ceased trading, with a BBC spokeswoman adding that "the arrangements [the corporation] was pursuing have not worked out and BBC Resources is currently inviting interested parties to consider making an offer to purchase."

BBC Costume and Wigs — which had been trading as part of BBC Studios — was the second largest collection of its kind in the UK, after the leading suppliers Angels The Costumiers.

Background to the Resources sale

The Resources business-to-business unit was formed in 1998 and operates television studios, post-production and outside broadcast facilities for it's parent share-holding company, the BBC. It does not own any studios or premises, its assets being equipment and staff (approximately 960 plus 165 administration staff).

Advertised for sale on 16th August 2007 in the Financial Times, The Times and Broadcast and in 2006-07 making profits of £5.2 million with a revenue of £126 million, the disposal — led by Ernst & Young — invited expressions of interest for the whole division or for each of its three operations separately. The BBC has yet to release the name of the preferred bidder for BBC Post Production.

BBC Resources was the first of the BBC's commercial business-to-business divisions to be set up as a limited company and is the last to be sold, the BBC having previously divested itself of BBC Technology and BBC Broadcast. BBC Enterprises, now known as BBC Worldwide, remained in-house as now does BBC Studios.

It had been intended to float Resources back in 2005, but this was postponed for two years following strike action and ACAS talks in June 2005 — the BBC giving an undertaking that there would be no preparations made to sell the company until January 2007, and no sale allowed before July 2007. It had been hoped to dispose of all three divisions by the end of this month.

This story has updates
See BBC spends £3.4m on sell-off


Wikipedia Learn more about BBC Resources and BBC Studios on Wikipedia.