You suggested that the Flextech investment, which, incidentally, could be as much as pounds 150m, "might seem like a rather small price to pay for all those billions of pounds worth of licence-fee investment". You further suggested that this could be seen as "giving away a highly valuable commodity for next to nothing".
This implies both a misunderstanding of the structure of the joint venture and of the fair trading arrangements which underpin the separation of BBC Worldwide finances from our licence fee-funded activities.
The joint venture will, from day one, pay BBC Worldwide the full market value for programmes supplied under the programme licence agreement that has been negotiated. This will provide an immediate return on the licence payers' investment in programmes and generates further funds for our programme- makers serving both BBC1 and BBC2.
In addition, when the joint venture moves into profitability, there will be a further income stream back to the BBC from any distributable profits agreed by the board, and of course the BBC will also be participating in the creation of valuable assets in the channels we create, as has been amply demonstrated by the valuation placed upon UK Gold.
This seems to me to suggest that the BBC has done a very good deal for the licence fee-payer, the BBC's programme-makers and BBC Worldwide.
R W PHILLIS
Chief Executive, BBC Worldwide
London W1Reuse content