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BBCWW gets M&A ban The BBC's commercial arm has been ordered to stop all mergers and acquisition activity and divest itself of stakes in non-BBC-branded international channels such as Animal Planet. The BBC Trust, the UK pubcaster's governing body, said today that BBC Worldwide should cease all M&A activity unless there were exceptional circumstances. It singled out BBCWW's acquisition of travel publisher Lonely Planet for censure, but stopped short of ordering a sell-off of the business. BBCWW's £89m (US$147m) purchase of a 75% stake in Lonely Planet back in 2007 was one of the division's most controversial moves and has continued to draw criticism, but the Trust only went as far as saying today that it would keep the asset "under review." The Trust said it would "not expect to consider a commercial deal of the scale and nature of the Lonely Planet acquisition in future," and added that it is placing the controversial and much criticised acquisition's "long-term future under review." The Trust is also demanding a divestment of stakes in non-BBC-branded international channels "over time where it makes commercial sense" – a ruling that could mean BBCWW having to give up its stakes in international joint venture channels such as Animal Planet and People + Arts. The statement calls for an end to mergers and acquisitions "unless there are exceptional circumstances," and also recommends lowering the current £50m threshold for M&A activity – the point where M&A activity gets automatically referred to the Trust for review – to £30m. However, with the M&A ban, it is envisaged that there is likely to be little opportunity to enact the threshold. Despite the M&A edict, the Trust is still keen for BBCWW to continue its talks with Channel 4 "to work to find partnership opportunities." "The opportunity to create a structure of lasting value to UK public service broadcasting as well as both individual parties is clear, as long as any deal creates value for both parties rather than transferring it out of BBCWW," the Trust said. The Trust has also called for a thorough review of the BBCWW catalogue, demanding that the division ends its association with programmes that would be considered in line with the BBC's public service image in the UK. BBCWW currently counts more than 200 indies among its suppliers and third party programming includes titles such as Primeval, Skins and Gordon's Kitchen Nightmares. "Given the primary importance of the BBC brand, this review finds that BBCWW must now exit/separate from any IP that is considered 'non-brand congruent' - that is, IP that would not be suitable for any BBC public service in the UK whether on television, internet, radio or mobile," said the report. It added that there were only a few anomalies, singling out BBCWW's involvement via a joint-venture partner in the distribution of the Grazia and Hello magazine titles in India. The Trust also demanded greater sensitivity towards the impact BBCWW's overseas activities may have at home in the formats space. The governing body called for a consultation on how formats developed by BBCWW for international audiences are released and operate in the UK. "Specifically, these formats will not be released until the BBC public service agrees that they will enhance and not compete with the public service offering in the UK, therefore optimising the benefits for licence fee payers," the Trust said. Finally, the review, which has today concluded after 18 months, stipulated the requirement for a smaller, more streamlined BBCWW board. Adam Benzine 24 Nov 2009 © C21 Media 2009 
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