From the Financial Times:

Sweeping changes on cards as BBC cuts costs
By Tim Burt in London
Published: July 5 2004 20:06 | Last Updated: July 5 2004 21:48

The BBC, the world's largest publicly-funded broadcaster, is considering a sweeping cost-cutting plan involving more than £100m (149m Euros, $184m) of savings and the possible sale of overseas channel and merchandising operations.

Senior BBC executives are this week finalising the terms of reference for separate internal reviews of the corporation's annual £320m cost base and the future of commercial activities such as the BBC Worldwide division.

Recommendations from the review could include the sale, break-up, restructuring or outsourcing of large parts of BBC Worldwide, which includes BBC America, BBC Prime and magazine publi shing.

A panel of BBC executives and industry advisers has been formed to draw up recommendations for the future of the corporation's commercial businesses by the end of the year.

"Businesses could be restructured or retained, but it's probable that the panel will take some convincing that they should all be kept," said one member of the panel who declined to b e named.

BBC Worldwide operations also comprise its production and programming joint venture with the Discovery network in the US and its overseas programme sales unit.

Last year, BBC Worldwide recorded a double-digit increase in operating cashflow to a record £141m.

One option could be to outsource part of the operations, as the BBC has already done with its accounting and property management operations.

In a separate development, the BBC is shortly expected to announce the preferred bidder for a 10-year contract to take over its information technology operations, with Siemens of Germa ny competing with Accenture and BT Group for the so-called BBC Technology business.

Such initiatives coincide with the launch of a new "value for money" study on the future of the broadcaster, which is seeking a further 10-year royal charter from the government.

The study will recommend measures to reduce overheads at the broadcaster from 12 to 8 per cent of its £2.68bn annual income.

Mark Thompson, the BBC's new director-general, appointed following the resignation of Greg Dyke earlier this year, had previously stated a more modest overhead target of 10 per cent.

Executives said the cost saving scheme would target "efficiency of programme spending" for the first time and could reduce annual running costs to about £220m a year.