The BBC and Veronis Suhler Launch $100 Million Joint Venture To Develop Major U.S. Publishing-based Consumer Media Company

Business Wire, Feb 2, 2000

Business &Entertainment Editors

NEW YORK/LONDON--(ENTERTAINMENT WIRE)--Feb. 2, 2000

Magazine Acquisitions Targeted as Platform

for Multi-Media Cross Marketing

BBC Worldwide Americas, Inc. (BBCWA) and New York merchant banking firm Veronis Suhler have formed a joint venture to build a major new U.S. publishing-based consumer media company. The new venture will initially focus on acquiring consumer lifestyle and informational publishing properties with cross-media expansion potential. It will incorporate the BBC's existing and future North American businesses in publishing including video, books and magazines. The 50-50 joint venture is being capitalized at $100 million of equity, with significant purchasing power beyond this.

BBC Worldwide Americas participates as the North American subsidiary of BBC Worldwide, the commercial arm of the British Broadcasting Corporation. Veronis Suhler is funding its share of the new venture through the firm's $1 billion private equity media buyout fund, VS& Communications Partners III.

A major portion of the joint venture is the recently formed BBC Worldwide America's Consumer Products Division. This includes the well-established BBC Video department which already enjoys a considerable share of the marketplace. The joint venture will create cross promotional opportunities with the BBC's other media where appropriate (see notes to editors section). It will fully exploit the Internet potential of the businesses it acquires or establishes. The venture does not include BBC America (the 24-hour cable channel in 11 million homes), bbcamerica.com, existing television sales or library sales. Nor does it include its network and co-production partnership with Discovery Communications, Inc.

The new enterprise combines two formidable media partners. In addition to investing its capital, Veronis Suhler brings substantial buyout, entrepreneurial and business development experience as a major independent media merchant bank. The BBC is among the world's preeminent media and entertainment brands, through its distinguished television and radio programming, as well as its publishing, home video, audio, interactive and online businesses. It is the third largest publisher of magazines in the UK as well as being one of the UK's largest publishers of books and videos.

Establishing a strong publishing business in the important US market is a key part of BBC Worldwide's ambitious global strategy. It enables the BBC to participate more actively in the full value chain than it does currently under purely licensing arrangements.

&uot;Our plan is to bring together profitable companies that are known for their strong editorial content and provide them with the resources to expand their brands, while exploiting opportunities for multi-media and new product development,&uot; explained James P. Rutherfurd, executive vice president of Veronis Suhler and head of the firm's investment banking group. &uot;We are developing opportunities--both direct acquisition and partnerships--with existing publishing groups across a number of media segments where we believe we can build significant franchise value,&uot; Mr. Rutherfurd said.

Mr. Rutherfurd said the continuing vitality of the U.S. media market allows ample room for new participants, especially one drawing on the inherent strength of the BBC as a partner. &uot;The BBC is an international media powerhouse -- with its global brand development in place through BBC Worldwide in the UK and rapidly expanding beyond,&uot; he said.

&uot;The BBC has long been a major provider of entertainment for American consumers as well, having created and co-produced some of the most distinctive, eclectic and highly successful television programming to air on this side of the Atlantic,&uot; Mr. Rutherfurd added. He cited such popular BBC series as Fawlty Towers, Antiques Roadshow, Great Food, Pride and Prejudice and Absolutely Fabulous, as well as family fare such as Wallace &Gromit, Noddy and Teletubbies.

Seeking Acquisitions in the U.S.

Overseeing the new venture on behalf of the BBC is Peter Phippen, president and chief executive officer of BBC Worldwide Americas, Inc. Mr. Phippen, 39, noted several developments over the past year alone that have positioned the BBC in the U.S. and Canada for wider exposure to the market. This includes the March 1998 launch of a 24-hour cable channel, BBC America, which delivers a rich lineup of U.S. premieres and BBC classics to 10 million U.S. households. The channel is a blend of award winning dramas, cutting-edge comedies, lifestyle documentaries and world-class news.

Mr. Phippen noted that many BBC programs have been co-produced with major U.S. broadcast partners for the American market, partners including the Discovery Channel, PBS, A& and WGBH-TV. &uot;The BBC has the potential to be an even bigger source of entertainment and publishing in this country, in part through product licensing spin-offs that are now such an integral part of media marketing,&uot; Mr. Phippen said. &uot;Our joint venture will be the platform on which this growth can occur.&uot;