BBC chief quits and mulls £800m buyout plan

The chief executive of BBC Worldwide, Rupert Gavin, shocked his staff by standing down yesterday. He is believed to be planning a £800m buy-out of Worldwide, the corporation's commercial consumer arm.

The chief executive of BBC Worldwide, Rupert Gavin, shocked his staff by standing down yesterday. He is believed to be planning a £800m buy-out of Worldwide, the corporation's commercial consumer arm.

Mr Gavin resigned after seven years at the head of the venture set up to generate profits for the BBC by selling rights, DVDs, magazines and other programme-related products.

His resignation follows statements made by senior BBC executives earlier this week to a House of Commons Culture, Media and Sport committee on the future of BBC Worldwide.

John Smith, the BBC chief operating officer, told MPs that BBC Worldwide, which saw sales rise 3 per cent to £657m last year, returning a record £141m to the BBC, could be "sold", "broken up" or "tidied up". The comments were made in the presence of the new BBC director general Mark Thompson, who recently decided that Mr Gavin should not be a member of a reduced BBC executive committee. Mr Smith has been asked by Mr Thompson to undertake a "comprehensive review" of the BBC's commercial activities and report by the end of the year.

Sources at BBC Worldwide said that Mr Gavin, a former managing director of BT's consumer division, would not want to carry on as part of a reduced organisation. He is also understood to believe that he is in a better position to make a bid for the BBC subsidiary from outside the corporation.

Asked if he was interested in bidding for BBC Worldwide, Mr Gavin said: "No decisions have been made [about] the future of any of the commercial businesses. If a decision were eventually made to dispose of BBC Worldwide I would obviously look closely at the possibility of making a bid."

He acknowledged that "consideration of the future of the commercial businesses within the BBC" had been a "relevant prompt" to his decision to stand down.

Analysts said yesterday that BBC Worldwide, if sold in its entirety, would be worth between £600m and £800m (based on last year's profits), although the BBC values it at "at least £1bn". Inaccurate reports yesterday suggested that Mr Gavin had been placed on "gardening leave". After informing staff at BBC Worldwide's brown-bricked "Woodlands" headquarters in West London of his decision to resign, he left for a weekend break but is expected back on Tuesday and will remain until October.

In his note to staff he claimed that his team had built BBC Worldwide into "one of Britain's truly global media players".

He said: "This is the seventh record year in succession that we have achieved since I joined BBC Worldwide back in 1998. Since that date, we have generated a total of £704m for the BBC and are well on our way to achieving the long term targets that the government set us."

Mr Gavin said that "from this position of strength", he believed "the time is right to make this move". In a press interview that appeared yesterday morning, Mr Gavin, an Old Etonian and former director of Saatchi & Saatchi, gave no indication of his intention to leave. He talked of having a "genuinely open mind" about Mr Smith's review and spoke about the prospects for selling DVDs of the hit BBC comedy The Office in America, following the programme's triumphs at the Golden Globe awards.

Mr Smith visited BBC Worldwide yesterday and told the surprised staff that he would now be overseeing the venture's affairs and that Mr Gavin would be "assisting the BBC on handover issues until he leaves in October". Asked about his future yesterday, he said he was "keeping my options open".