Luard in line for pounds 6m windfall as Flextech signs BBC deal
Tuesday 18 March 1997
BBC Worldwide, the BBC's commercial arm, stands to gain income of more than pounds 600m from the launch of up to eight pay-television - but not pay- per-view - channels in Britain and abroad within a few years, according to TCI, Flextech's US parent. It is believed to be the first time the BBC has taken a direct equity stake in a quoted company.
The deal with Flextech to develop the subscription channels marks the BBC's most significant step in commercial broadcasting. But deputy director general Bob Phillis, chairman of BBC Worldwide, insisted there was no risk to licence payers' money and that commercial advertising would not be associated with the BBC brand.
"I want to make it quite clear that where programmes are funded by the licence fee, they will always, always be seen first on BBC1 or BBC2," he said.
The deal involves the creation of two joint ventures to combine the BBC's archive, scheduling and production skills with Flextech's funds and multi-channel TV management and marketing knowledge. The vast majority of the programmes will be repeats, though some joint programme production is envisaged a later stage.
The main deal will be to develop and launch mainly digital new pay-television channels in Britain. The second involves buying out and developing in analogue, and later in digital formats. Flextech and BBC Worldwide will take a 50 per cent stake in the two ventures for up to 30 years. The service will be rolled out later this year.
Flextech is contributing pounds 22m of equity and can make pounds 118m in credit facilities available.
Flextech, which also reported virtually unchanged pre-tax losses before exceptional credits for1996 of pounds 16.8m, is buying out pay-TV channels UK Gold and UK Living by issuing 35 million shares to its owners, media groups Pearson, America's Cox Communications and BBC Worldwide. The deal is worth about pounds 270m and values UK Gold at about pounds 210m and UK Living at pounds 104m.
In return, Cox, Pearson and BBC Worldwide will take 13.3, 5.6 and 3.5 per cent stakes respectively in Flextech.
Mr Luard plans to exercise options, granted at 92p, over 600,000 shares and sell these, together with more than 305,000 shares he already holds. Last night shares in Flextech closed down 21p lower at 751p.
Comment, page 21
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...