The BBC’s commercial arm and Discovery have agreed to split their UKTV joint venture, a move that will see BBC Studios pay £173m to Discovery to acquire the UKTV brand and the bulk of its channels.
Under the terms of the deal, BBC Studios will take full ownership of UKTV’s seven entertainment channels – Alibi, Dave, Drama, Eden, Gold, Yesterday and W – along with digital player UKTV Play.
Discovery will take full control of UKTV lifestyle channels Good Food, Home and Really.
The companies said that the split, which breaks up their 50-50 ownership of UKTV, complements the strategic focus and commercial business of both organisations.
BBC Studios said that BBC programmes currently make up around half the viewing of the seven UKTV channels it’s taking over, while Discovery has a portfolio of 16 other channels in the UK and its strategy is to further strengthen its position in factual entertainment.
BBC Director General Tony Hall said that BBC Studios taking control of the UKTV channels that best fit its programmes is “good news” and means “a secure future with long-term commercial returns”.
BBC Studios’ payments of £173m to Discovery will include a balancing payment in relation to the channels acquisition and the assumption of £70m of debt, currently financed by Discovery. This will be financed through existing borrowing facilities.
Discovery will also receive at least an additional £10m from UKTV, as the parties will share the existing cash on the company’s balance sheet, reflecting outstanding dividends and other value transfers to Discovery through the deal.
On competition, Marcus Arthur, President, UK, Ireland and ANZ, BBC Studios Distribution, will also assume the role of CEO, UKTV. Discovery EMEA’s EVP, GM, UK/IRL/ANZ and Commercial Development, James Gibbons, will manage the UKTV lifestyle channels as part of Discovery’s UK portfolio.
The deal is expected to complete in late spring 2019 and was announced at the same time that Discovery revealed it will launch a factual SVOD service featuring landmark BBC Studios programming like Planet Earth and Blue Planet.