Background to the report
The BBC’s Royal Charter permits it to undertake commercial activities, provided these activities fit with its mission and public purposes, are not funded through licence fee income, and are undertaken with a view to generating a profit.
The BBC cannot undertake commercial activities directly, but must do so through commercial subsidiaries. In 2017-18, the BBC has four main commercial subsidiaries of varying size and complexity to manage its commercial activities – Worldwide, Studios, Global News and Studioworks.
The BBC is to merge Worldwide and Studios from 1 April 2018 to create a new commercial entity, to be called BBC Studios, which will unite the BBC’s commercial production and distribution arms.
Content and scope of the report
The National Audit Office were granted access for the purposes of audit to the BBC’s commercial activities for the first time, starting in April 2017. This report, our first on this subject, is a landscape review of the BBC’s commercial activities, setting out how the BBC organizes these activities and the key risks and challenges they currently face.
Part One sets out the scope and set up of the BBC’s commercial activities;
Part Two explains the performance of the BBC’s commercial activities; and
Part Three assesses opportunities and challenges
The BBC’s expanding commercial activities are undertaken on behalf of licence fee payers and exploit the significant assets that licence fee payers have paid for. The public interest in holding the BBC to account for these activities is therefore clear.
Granting the NAO access to the commercial subsidiaries for the first time is an important step in improving the transparency of the BBC’s operations. We will continue to scrutinise the BBC’s commercial activities to inform Parliament and to help the BBC optimise the value for money it delivers.