C4 eyes BBC links to spin off '4 Rights' arm

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The Independent Online

Channel 4 is considering plans to spin off its television rights business, "4 Rights", as part of the broadcaster's review of its commercial division, 4 Ventures.

One option under discussion is to form a joint venture with the BBC to run 4 Rights, which sells Channel 4 programming to television companies overseas and merchandise such as DVDs. Last year, it was the most profitable part of 4 Ventures.

This month Channel 4 launched a strategic review of 4 Ventures, which should be completed by the end of next month. 4 Ventures also controls the Film Four and E4 channels, provides educational programming and resources, and offers interactive services and broadcast facilities.

An outright sale has been ruled out. Last year the business made an operating profit of £4.1m on turnover of £138.8m, after losing £17.7m in 2002.

Former investment banker Rob Woodward, who heads the division, is quitting next month as part of the review. Following the arrival of Andy Duncan from the BBC as chief executive in July, Channel 4 wants to focus on providing better public service broadcasting. He is exploring ways to form joint ventures with the BBC to achieve this.

Most of the 4 Ventures unit is expected to be brought back within Channel 4 proper. This includes the channels and learning divisions, the two largest parts of 4 Ventures. The future of the services division, which controls Channel 4's interactive, marketing and studios businesses, is less certain as they are not directly tied to Channel 4's public broadcasting obligations, which include a quota of educational programming. But a sale of this business is unlikely.