UK Netflix rivals the BBC and Discovery Eye UKTV breakup

The BBC and US pay-TV company Discovery appear to be in the final stages of an agreement to liquidate the gold and Dave broadcaster UTVTV in the amount of one billion pounds. The agreement will accelerate the plans to build a UK streaming rival to Netflix.

UKTV, which has a mix of 10 free-to-air and pay-TV channels, is owned by Eurosport owners Discovery and BBC Studios, the commercial arm of the BBC.

The BBC has long sought to take full control of UKTV – which has made more than £ 90 million in profits last year and is paying £ 54 million a year for rights to BBC shows from Top Gear to Dad's Army.

Earlier this year, the BBC examined a buy-out after a change in ownership in the joint venture agreement was triggered by Discovery's acquisition of Scripps, the company's former partner at UKTV. The BBC, which does not have the financial flexibility to conduct a buy-out on its own, has been in discussions with ITV and Channel 4, but the 90-day window for a bid expired in June with no partners on board.

All in all, it is believed that the BBC and Discovery have reached an agreement to separate UKTV, which has been operating since the early 1990s, and to divide channels between them.

It's not clear how the mix of channels will be split, but those that are most filled with BBC archive content, such as drama and gold, would be obvious candidates to stay with the corporation.

If a final agreement can be reached, a BBC board meeting is expected later in September, once the plan has been finalized.

In addition, discussions between the BBC, Channel 4 and ITV about cooperation in creating a UK streaming service to combat the increasing power of Netflix and Amazon in the UK have been partially hampered by the uncertainty surrounding UKTV.

Much of the delay is attributable to the BBC, which divided the video-on-demand rights into their programs, with the corporation including various deals for UKTV and others such as Netflix. Earlier this year, Virgin Media blew up the channels of FMVTV and accused the BBC of being a "linear dinosaur in an on-demand world" to hold back and divide digital rights.

Separating from UKTV would have a major impact on Channel 4, which handles the TV channel's television advertising mission of £ 250 million a year. Channel 4 may lose tens of millions of pounds in revenue, depending on which channels are backed by Discovery, a Sky TV commercial contract.

Channel 4 and the BBC have been holding talks over a possible partnership for months, including video-on-demand rights, which could be negotiated by UKTV after fate becomes public knowledge. The BBC's talks with ITV on UKTV have also stalled in part in terms of video-on-demand rights.

The established UK broadcasters held similar talks two years ago, but in the end, only the BBC and ITV have managed to launch a Netflix-like service in the US called Britbox. It was hoped that partners, including Channel 4, would go on board for a British service, but a British launch did not take place.

The BBC, Discovery and UKTV did not want to comment.

In the meantime, Big Brother was able to return to ITV after the FTSE 100 station reportedly submitted the bid for the show's production company, Endemol Shine. The Dutch company, which also produces The Fall, MasterChef, Black Mirror and Peaky Blinders, will be auctioned by the private equity firm Apollo and Rupert Murdoch's 21st Century Fox in a £ 3 billion auction.

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Endemol is loss-making and was hit last week when Channel 5 said that Big Brother would be out of the running after nearly two decades after the show's release on British TV.

Other bidders include All3Media, which is backed by Liberty Global, a holding in ITV, and the Banijay Group, a Vivendi-backed French production company.

In ITV's half-year results in July, managing director Carolyn McCall, who came from the low-cost airline easyJet in January and previously served as chief executive of the Guardian Media Group, said the station wanted "more than just television."

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