Worldwide closes in on Channel 4 deal as revenues top £1bn

BBC Worldwide and Channel 4 are weeks away from sealing a deal that would see the two assets folded into a new joint venture company.

The commercial arm of UK public broadcaster the BBC and the commercial free-to-air channel have been locked in talks for some time and Worldwide chief John Smith said that negotiations had been ‘more complex and difficult than either of us would have liked or wanted’. He said that the agreement would focus on the creation of a new business bringing together complementary parts of each operation. “We have a lot of content and they don’t have much,” he said. “They have a great UK ad sales house and have some great brands.”

Smith made the comments as BBC Worldwide announced revenues had reached £1bn (€1.1bn) for the full year to the end of March 2009. Results showed revenues up 9.5% year-on-year to £1.004bn.

Sales for Worldwide’s channels business rose 23% to £225.6m, driven largely by the rollout of BBC-branded channels. For EMEA, sales were up 17.3%. During the year, Worldwide launched 15 branded channels, meaning it now has 44 channel feeds, reaching 300 million viewers.

Operating profit was down 12.8% to £102.6 million, however. Worldwide said major investments were to blame for the decline. It also revealed that the failed Kangaroo on-demand project led to a £9.1m write-off during the year.