Tuesday, December 29, 2015

Get out of toys and t-shirts

The Culture Select Committee, looking at BBC Charter renewal, asked BBC Worldwide to break down its profits by activity rather than region, following up a line by Steve Hewlett, and a challenge from ITV.

The committee has published Tim Davie's response, and here's a summary. The percentage margins are my calculations.

Breakdown by region/BBC Worldwide reporting line:
UK: sales £362m; profit £53m (14%)
North America: sales £300m; profit £33m (11%)
Australia & New Zealand: sales £82m; profit £16m (19.5%)
Global Markets: sales £276m; profit £32m (11.5%)

Breakdown by business area:
Channels: sales £357m; profit £63m (17.6%)
Sales & Distribution: sales £345m; profit £62m (17.9%)
Production & Formats: sales £162m; profit £12m (7%) (or £20m - 12% - excluding impact of high end television tax relief)
Consumer Products: £124m; profit £6m (4.8%)

Tim Davie notes: The profit margin on Production and Consumer Products businesses is comparatively lower than the other parts of the business but nevertheless helps us maintain profits and therefore maximise total returns to our parent. Our overall profit margin has increased over the current Charter period from 10% to 14% but we are actively pursuing further efficiencies to secure future profitability and ability to invest in long-term growth.

Contrary to the evidence given this week by ITV to the Committee, we operate a profitable owned and operated channels business outside of the UK.

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