BBC Chairman Rejects Privatization for BBC Worldwide

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LONDON: In his first speech as chairman of the BBC Trust, Lord Patten said that certain core commercial activities must stay within the organization, including program distribution, branded channels and digital services, rejecting calls for BBC Worldwide to be privatized.

Discussing the BBC’s commercial activities during the RTS Fleming Memorial Lecture, Patten stated: "If we get it right, [BBC] Worldwide can continue to generate international commercial profits that both support and effectively subsidize the BBC’s public-service content. Including, in future, the World Service. It makes no sense to sell Worldwide. Its symbiotic relationship with the BBC could not survive privatization; competition requirements would likely cut that to shreds. Privatization would destroy not enhance value. Moreover it is difficult to see how public policy concerns about Worldwide and its role in promoting the exports of other creative businesses would sit alongside shareholders’ commercial and fiduciary responsibilities. So there is a core of commercial services that the Trust believes must stay completely within the BBC because they are central to the future of the corporation strategically, reputationally and commercially. They include program sales and distribution, all BBC-branded channels, digital services and the new international iPlayer, bbc.com and BBC World. We will not be willing to consider any proposals for privatization either in whole or in part of any of these core elements."

Patten said that he’s instructed Director-General Mark Thompson to "look again at how Worldwide could work more closely with other U.K. broadcasters and producers, who make so many excellent programs. The U.K. has two advantages over the rest of the world: the quality of much of our television and the English language. I want to know whether there is scope for Worldwide, with its scale, to make more of those advantages for the benefit of the whole economy."

Patten also said he wants to take on the "toxic" issue of the salaries of BBC senior management, with a ban on bonuses for executive board members and the reduction of the number of senior managers from 3 percent of the workforce to 1 percent by 2015.

"Public trust suffers whenever there is evidence of corporate behavior that doesn’t fit the ideal," said Patten. "The BBC should always remember this and understand how it looks from the license-fee payers’ point of view. That’s why, watching from the outside, the issue of senior executive pay has looked so toxic for the institution as a whole. License-fee payers don’t expect the BBC to pay sky-high commercial rewards to people that work for a public service. They do expect the BBC to deliver the highest quality programs and services. It needs—and indeed it has—excellent people to do that. The challenge is to balance these demands in the right way."

On reducing the number of senior managers, Patten said the intent is to "create a smaller group of people more clearly accountable for spending the license fee. That means some further reductions and it will also mean a re-drawing of the boundaries around who is and is not a senior manager."

He continued, "The freeze on bonuses for the most senior executives will continue. No Executive Board member will get a bonus in future—the public service BBC needs to distance itself, in this way, from the market. And private health insurance will be phased out for senior managers. Senior staff shouldn’t have those sorts of benefits if they are not available to everyone."

Moreover, Patten said, "Every year we will publish a pay multiple so the public can see exactly how the pay of those at the top of the BBC compares to the rest of the organization."

In the speech, titled "The BBC—Old Values, New Technologies," Patten reiterated the objectives for the organization defined by BBC Trust: "increase the distinctiveness of the programs; improve value for money; set new standards of openness and transparency; do more to serve all audiences across all four Nations."

He also discussed new opportunities for the BBC in the digital age. "The BBC has to try to keep pace with new technology without leaving its core audience behind. That may not be easy in a world where different generations use media in different ways: older people staying with the media they know; digital natives behaving rather differently. The BBC needs to provide a service to digitally literate 20 year-olds just as much as to old-fashioned newspaper-reading 70 year-olds. This goes beyond the sort of editorial challenge that has always existed for a broadcaster trying to reach a universal audience. It’s now also a challenge with a technological dimension."