LONDON: The BBC will sell its wholly-owned commercial subsidiary BBC Technology. The move follows a strategic review of the BBC's technology requirements for the next decade.
The review identified potential annual savings for the BBC of between 20 - 30 million if its technology services were outsourced.
The review concluded that the BBC should conduct an European Union (EU) procurement process in which the winner would buy BBC Technology. As part of that process it will take on about 1,400 staff currently employed by BBC Technology.
Combining the procurement process with the sale of BBC Technology as a whole means the BBC can leverage maximum value and, as a result, invest more money in its programmes and services. The sale is subject to the approval of the Secretary of State for culture, media and sport.
The move offers growth opportunities for the staff at BBC Technology as the company will undoubtedly attract bids from major technology businesses with scale and expertise. 1,400 people are likely to transfer with BBC Technology to the successful bidder after the EU procurement process. This is due to be completed next year.
BBC Technology was created a couple of years ago to deliver significant savings to the BBC through its contract for technology services, including desktop support, and to generate third party revenues. The company has won important contracts in the UK and abroad with companies such as Hutchison 3G, ESPN, DirecTV and National Public Radio. Last year, BBC Technology delivered 19 million in profits and price reductions back to the BBC.
BBC Director-General Greg Dyke was quoted in an official release saying, "By taking our technical support contract to the market and selling BBC Technology we can achieve significant savings over a sustained period of time. We would also expect to receive a significant sum of cash for the business. While some BBC Technology staff will inevitably feel worried about the prospect of change we've reached the conclusion that this is a win/win situation for the BBC and the staff.
"This way the staff will continue working on BBC business. However at the same time BBC Technology, which has been very successful at winning outside contracts, will get the capital injection it needs to expand further albeit in someone else's ownership. When we were given our current funding agreement in the year 2000 by Chris Smith, the then Secretary of State for culture, media and sport, he made it a condition that we raised an additional one billion over the next seven years. He suggested one way of contributing to that was to sell a BBC asset. This is what is now planned."
