BT in £60 million YouView buyout talks with BBC

BT is in talks towards a deal worth tens of millions of pounds for full ownership of YouView, its set-top box technology joint venture with Britain’s public service broadcasters and broadband rival TalkTalk.

YouView
YouView

It is understood that discussions have hit repeated snags over valuation, with the BBC and TalkTalk said to be pushing for a higher price and guarantees over the future of the project.

BT initially suggested it could buy out YouView’s six other shareholders for less than £20m, according sources. Valuations in the region of £60m are now under discussion.

The company is jointly owned by BT, TalkTalk, the BBC, ITV, Channel 4, Channel 5 and Arqiva, the privately held company that run’s Britain’s television mast infrastructure. It was initially conceived as a successor to Freeview but almost all YouView households are BT or TalkTalk pay-TV customers.

BT is seeking full control to allow it to invest to accelerate development of key part of in its multibillion-pound pay-TV push. Senior executives have been frustrated at the relatively slow pace at a time when rivals Sky and Virgin Media are rapidly updating their set-top boxes.

Most of the YouView shareholders are understood to be keen to sell up, with the BBC seen as the biggest barrier to a sale.

Price is said to be a key concern. Given the project did not meet its original objective of succeeding Freeview, BBC chiefs fear criticism if they are seen to have in effect subsidised BT. The broadcaster has pumped tens of millions of pounds from the licence fee in to the project since it was founded as Project Canvas in 2008.

Alongside the financial concerns, the BBC is also understood to be seeking assurances over the future development of public service features. YouView menus offer a zoom function, for instance, to assist partially sighted viewers.

TalkTalk is meanwhile keen to do a deal that means it can still provide YouView boxes to households under contract with BT. It lacks the financial firepower of its much larger rival however, and could cut its costs if it was no longer obliged to help fund development of the technology.

It also aims to shift the focus of its television ambitions to an app-based service, based on its acquisition last year of Blinkbox, Tesco’s streaming arm.

Full BT control would bring a formal end to years of industry in-fighting over YouView. The project suffered heavy delays amid technical problems and boardroom rows.

Lord Sugar was brought in as a a troubleshooter chairman, eventually bringing YouView to market in mid-2012. By then BT had developed serious ambitions in pay-TV as it sought to defend its broadband business from incursion by Sky.

All parties declined to comment.