Ofcom will launch a review of the BBC’s commercial arm, BBC Studios, after it “reduced the granularity” of its financial reporting.
The regulator said the BBC “withdrew its voluntary commitment” to report separate financials for its production business and its distribution division and offered only “a superficial explanation” as to why.
It comes after BBC Studios, which produces series such as Strictly Come Dancing, Top Gear, Doctor Who and Planet Earth, merged with international distribution unit BBC Worldwide last year.
We've had an excellent first year as the new BBC Studios, made possible by the boundless energy and dedication of our people. Together with our indie partners, we’re proud to invest in producing the best British content. Here's a selection of our highlights of the year: pic.twitter.com/VLUcJYZl3w
— BBC Studios Press Office (@BBCStudiosPress) July 2, 2019
Ofcom’s second annual report into the BBC said: “The BBC has made some changes to the lines of business it maintains and reports on within BBC Studios.
“The BBC subsequently withdrew its voluntary commitment that the lines of business in the new BBC Studios would be consistent with those that were in place before the merger of its production activities and BBC Worldwide in March 2018.
“This has had the effect of combining the previous five lines of business into two (including merging production and distribution activities), reducing the granularity of reporting for BBC Studios.
“The BBC did not engage with stakeholders about the effect of the removal of its commitment and only published a superficial explanation of the reasons for the change.
“We will be considering, as part of our review of BBC Studios, whether the lines of business provide sufficient transparency for Ofcom and stakeholders on the performance of the different activities within BBC Studios.
“This will include whether there should be any changes to the trading and separation requirements and we will publish our views, to give stakeholders an opportunity to comment, as a priority within this review.”
BBC Studios “funds, creates, distributes and commercialises premium content for the BBC and other companies both in the UK and internationally”, according to its website.
A BBC spokeswoman said: “We are committed to providing appropriate transparency about our commercial operations, and are happy to work with Ofcom to further improve this.”