Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Accepted in Part
BBC's commercial returns reporting lacks transparency, hindering parliamentary assessment of strategic objectives.
Recommendation
Alongside PSB savings, the BBC sought to increase returns from its commercial arm. BBC Commercial achieved record sales of £2.2 billion in 2024–25, up from £1.9 billion the previous year, and the NAO concluded that BBC Studios had succeeded in delivering increasing returns by adapting to a changing market.29 The BBC has committed to delivering £1.5 billion in commercial returns over five years by 2027–28.30 The BBC explained how these returns are generated, primarily through dividends and investment in programming from BBC Studios, and emphasised that creating and exploiting new IP was a key lever in its overall commercial performance.31 However, while the BBC publicly reported progress against its public service savings target, it did not report in its 2024–25 Annual Report 27 BBC Group Annual Report and Accounts 2024–25, p. 9, 12, 58 28 Qq 36, 37 29 BBC Group Annual Report and Accounts 2024–25, p. 9, 12, 58 30 BBC, BBC Group Annual Report and Accounts 2024–25, p. 81 31 Qq 38, 43-44 11 and Accounts on progress towards its commercial returns target of £1.5 billion for 2022–23 to 2027–28, despite telling us it had achieved £1 billion to date.32 The BBC acknowledged this omission during our evidence session and committed to providing clearer reporting on this target in future years. We note that the previous reporting of commercial returns lacked clarity, making it difficult for Parliament to assess performance against strategic objectives.33
Government Response Summary
The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts, aligned with the 2026 publication date; they already report to Ofcom.
Government Response
Accepted in Part
HM Government
Accepted in Part
3.1 The BBC partially agrees with the Committee’s recommendation. Target implementation date: 2026 aligned with Ofcom and BBC Annual Report and Accounts publication. 3.2 The BBC is committed to report whatever is required under accounting regulations. While the BBC already also provides a substantial amount of information on its commercial activities in its Annual Report and Accounts, it will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts. 3.3 The BBC Group already reports annually to Ofcom who monitor its commercial activities. Annual reporting to Ofcom includes detailed financial performance of BBC Studios and BBC Studioworks, its two core commercial businesses, including revenue, direct and common costs, and therefore both Gross Profit and percentage profit margin (Earnings Before Interest, Taxes, Depreciation, and Amortisation). The BBC Group’s reporting obligations to Ofcom are detailed in the BBC’s Annual Report and Accounts, along with its other general duties in relation to commercial activities.