2pm update

BBC Resources to be split up

This article was first published on guardian.co.uk on Friday March 07 2008. It was last updated at 14:02 on March 07 2008.
BBC Television Centre

BBC Television Centre: the corporation has decided to keep its studios business at the site. Photograph: David Levene

BBC Resources is to be broken up, with the BBC commercial subsidiary's outside broadcast unit set to be sold to satellite and racecourse TV company Satellite Information Service and the corporation keeping its studios business at Television Centre in west London.

Staff in BBC Resources' third business, post production, are awaiting their fate as the BBC continues discussions with just one bidder - understood to be a company based in west London.

BBC sources claimed that SIS has bid more than £20m for the outside broadcast unit, although the amount will not be finalised until contracts are signed.

Staff transferring to SIS will have their terms and conditions guaranteed for three years and no compulsory redundancies for one year after the sale. SIS has also offered to establish a defined pension scheme.

However, questions are still being raised within the corporation about the value for money created by selling off BBC Resources.

One insider said: "How much money has been spent on this sale? A lot of consultants have been used."

Discussions are still ongoing about what will happen to the studio staff that are being kept by the BBC, once Television Centre in west London closes down in 2012 and some broadcasting and production departments move to Salford in the north-west.

It is not yet known if studio workers will be offered the same redundancy package as those in other BBC divisions, such as children's.

BBC Outside Broadcast operates a large fleet of television production, sound, support and communications vehicles that are a familiar sight at sporting and cultural events.

The OB operation being sold to SIS also includes award-winning special cameras that are used for music festivals, major state occasions, Wimbledon, the Olympics and World Cup football. It is not yet known how much SIS has bid.

Today's confirmation of the breakup of BBC Resources, as predicted by MediaGuardian.co.uk, is good news for studio staff, who will not now be leaving the corporation.

However, the turn of events is likely to be seen as a blow by the BBC, which wanted the future of BBC Resources finalised by the end of its current financial year, March 31.

The division, which has 1,100 staff, was put up for sale last summer, either as a whole or in separate parts.

However, a number of sticking points emerged for potential bidders, including the question of the pension liability of BBC Resources staff, making the deal complex.

Today the BBC said in a statement: "Due to the complex nature of this process the BBC has decided to complete the sale of its outside broadcasts business first whilst continuing discussions for post production. The studios business will be retained by the corporation."

Andy Thornton, the project director for the BBC Resources sale, added: "SIS offered the BBC a good deal and best value for licence fee payers; they have shown a real desire to grow the business and have committed to a long-term relationship with the corporation, securing the future for some of the most vital services supporting BBC output."

The SIS chief executive, David Holdgate, said: "This is an ideal acquisition for SIS; it's a perfect fit with our existing SISLink and sports coverage, and crosses all parts of our business. SISLink markets its services to a very similar customer base.

"The quality of the BBC's outside broadcasts is legendary and we are delighted that SIS will be working closely with the talented staff that deliver these services, and will have its part to play in helping them build on that reputation over the years to come."

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