BBC Worldwide, BBC Studios to Combine Into Single Commercial Entity

BBC Broadcasting - Getty - H 2016
Peter Macdiarmid/Getty Images

"It will ensure the BBC is best placed to succeed both creatively and commercially and will better serve license fee payers," it said.

U.K. public broadcaster BBC said Wednesday it will merge BBC Studios and BBC Worldwide to form a single commercial operation that will be called BBC Studios.

BBC Worldwide is known for its content financing, sales, commercial channels and stakes in production companies, while BBC Studios is the BBC’s main production arm, which the broadcaster separated earlier this year. After originally planning to operate them separately, the BBC said it would now bring them together in a "simplified organization with a single business plan and combined operating model."

While BBC Studios and BBC Worldwide already work closely, including on current TV hit Blue Planet II that is produced by BBC Studios and over three quarters funded by BBC Worldwide and partners, "joining forces will allow them to operate more simply and efficiently," the BBC said. "All of the major established U.K. industry players integrate their program production and distribution in this way."

For its most recent fiscal year, BBC Worldwide reported revenue of $1.4 billion, with BBC Studios, whose shows include the likes of Strictly Come DancingEastEnders and Antiques Roadshow, estimated to add another $500 million to that.

The combined business is expected to start operating in April. It will be led by BBC Worldwide CEO Tim Davie as CEO and BBC Studios head Mark Linsey as chief creative officer.

The BBC said key goals of the combination will be "maximizing the intellectual property value of BBC programming for the benefit of UK license fee payers" and "supporting the U.K. creative economy by distributing British content as a cultural export and source of global influence."

It added: "At a time of an increasingly competitive and global market for production and distribution, this new organizational structure will bring the BBC into line with the rest of the industry." And it said the new structure would help "ensure the BBC is best placed to succeed both creatively and commercially and will better serve license fee payers."

Executives also touted the planned combination. "In a fast-changing TV industry, securing the future success of the BBC is vital," said BBC director general Tony Hall. "Creating a single BBC Studios will bring the BBC in line with the industry, be simpler and more efficient. It will help ensure that license fee payers in the U.K. continue to receive outstanding British programs, which reflect British lives, long into the future."

He added: “It will also ensure the BBC can continue to play its crucial role in supporting the successful U.K. creative economy.”

Davie said: "Creating one company, in line with market norms, is a natural step in this market. The new BBC Studios will be focused on the highest-quality British content, underpinning our future financial return to license fee payers. It will allow us to better serve customers, indie partners and the wider industry, resulting in world-class British productions for audiences in the U.K. and overseas."

And Linsey said: “Bringing BBC Studios and BBC Worldwide together will help secure the BBC’s future and guarantee our unrivaled creativity, risk-taking, quality and range.

Hall recently cited a study by Mediatique that forecasts that spending on British programming could fall in real terms by 500 million pounds ($670 million) over the next decade. "A successful new BBC Studios will be better placed to make the investments others will not," the broadcaster said Wednesday.