Annual profits fall at BBC Worldwide on Woolworths, video-on-demand write-offs

Profits fall at BBC Worldwide

LONDON — Profits at BBC Worldwide, the commercial arm of the British Broadcasting Corp., almost halved after writeoffs relating to the collapse of retailer Woolworths and the decision by competition authorities to block a video-on-demand venture.

The BBC also announced Tuesday that it was suspending bonuses for its 10 senior executives indefinitely and implementing a review of executive pay.

BBC Worldwide, which markets BBC programs including “Doctor Who” and “Dancing with the Stars” internationally and owns travel publisher Lonely Planet, said net profit dropped to 40.8 million pounds ($66.5 million) in the year ended March 31, from 77.6 million pounds in the previous year.

That jeopardizes the unit’s aim to generate profits in excess of 200 million pounds by 2012.

The profit fall came despite a 9.5 percent rise in revenue that took the broadcaster just past the 1 billion pound mark for the first time.

BBC Worldwide said it took a 15 million pound hit from the loss of its joint venture DVD publishing business 2entertain with collapsed retailer Woolworths. The decision of regulators to veto Kangaroo, its proposed online video venture with Channel 4 and ITV, cost it another 9.1 million pounds.

However, the group said that major TV brands, such as “Dancing with the Stars,” the international TV show based on the local “Strictly Come Dancing,” had delivered “particularly good returns.”

“In spite of volatile conditions and heavy investment in several parts of the business, we remain encouraged by the growth prospects and performance of our core operations and brands around the world,” said John Smith, Chief Executive of BBC Worldwide.

Separately, BBC Trust chairman Michael Lyons said the decision to suspend executive bonuses reflected the fact the broadcaster was “sensitive to the prevailing economic wind” over pay and bonuses.

The bonus suspension was announced before the release of the broadcaster’s annual report, which showed that the total pay of the BBC’s director-general and its chairman rose in the last year despite cost-cutting measures. Director-general Mark Thompson’s total remuneration increased by 2 percent to 834,000 pounds.