Running away with himself: Beeb's salesman goes too far

He was hailed as a commercial mastermind. But then the Barrymore memoirs brought BBC Worldwide's high-flying boss down to earth, says Sonia Purnell

The old guard at the BBC can barely conceal their glee. At last, they have proof that what they consider to be those heavy-handed, interfering, profits-crazed people over at BBC Worldwide, the corporation's commercial arm, have carried the commercialisation process one step too far.

"The Michael Barrymore book was an accident waiting to happen to BBC Worldwide," says one senior BBC veteran. "But the pound signs blinded them to the dangers when warning bells should have been ringing the day Stuart Lubbock was found dead in the pool.

"What on earth are we doing spending half a million on someone's autobiography which can hardly be described as adhering to the BBC's core values or brand? There must be better ways of spending licence-payers' money."

After all, even the BBC's notoriously fluid commercial policy guidelines state that the corporation should only "distribute the published work of others [that] complements its core portfolio and makes optimal use of its resources".

Eventually, of course, director-general Greg Dyke personally intervened to pull the plug on Running Away from Myself, after the furore in the press and the public outrage of the Lubbock family, who branded the book "squalid". But not until after the BBC had already handed over an estimated £150,000 advance to the entertainer, who now faces a perjury investigation into evidence he gave at the inquest into Mr Lubbock's death.

And many in the BBC are asking why Rupert Gavin, the highly paid, independently wealthy businessman brought in from BT to run BBC Worldwide in 1998, apparently neither foresaw the dangers in publishing such a book, nor responded himself to the howls of pro- test about the BBC's involvement after the inquest. The fact that he was uncontact- able, on a business trip that turned out to be a holiday as well, only makes matters worse in the eyes of his critics.

"Rupert has been hailed as this great success story at BBC Worldwide, but he often gives the impression of being rather uninterested in it. He's not an approachable man, and is often abrupt with his staff," says one senior industry rival. "And what people on the outside can't understand is why BBC Worldwide is not making more money than it actually is."

Mr Gavin, an Old Etonian and Cambridge man, joined BBC Worldwide four years ago after a high-flying career in both advertising and theatre production (his company staged An Evening with Gary Lineker, among other successful shows). He is reputed to have made a lot of money – and even now is the BBC's second highest-paid employee, on £349,000 a year – but modesty has perhaps never been his strong point.

Of his work for Dixons, a client of the advertising firm Saatchi & Saatchi, where he was then a director, he claims: "I took personal computers into the high street for the first time and introduced video games to the UK. People blame me for quite a lot."

On paper, his achievements at BBC Worldwide sound equally impressive. He has formed highly successful partnerships with Discovery and others, creating the Animal Planet and BBC America channels in the US. He has sold television formats such as The Weakest Link to no fewer than 75 countries, and made £10m for the BBC from sales of the Blue Planet series, fondly known as "10 hours of fish".

He has proved particularly adept at spotting the commercial potential of offshoots including books, toys, videos and magazines. Anybody who has bought a Teletubbies or Tweenies doll for their children will have contributed to the BBC's income, thanks to Mr Gavin.

During one of the most severe media recessions ever, BBC Worldwide's overall sales last year rose by 12 per cent to £660m, an unprecedented half of which were overseas. Overall profits rose to £25m (money which is directly reinvested in the business), but more crucially BBC Worldwide contributed a record £106m to the BBC's coffers last year, up from £96m the year before and five times what it was when he took over.

Of this, more than £80m will go straight into programming budgets. Set against the total BBC programming spend of £2.6bn a year, however, that figure does not look quite so awesome – equivalent to just £5 a head for every licence payer. Mr Gavin has been set the target (by Mr Dyke) of contributing £200m a year to the BBC purse by 2007. But the jury is out on whether he can do it.

"BBC Worldwide is very aggressive and wants to own everything. People feel browbeaten by them," says one industry insider. "But although they seem to get the rights to everything on such favourable terms, what they make is really very little on such a vast turnover. The whole set-up is opaque. Where does the rest of the money go?"

Neither BBC Worldwide's accounts on its website nor its spokeswoman could throw light on this subject. Maybe the fact that BBC Worldwide employs 2,000 staff provides a clue.

Despite the doubts across the industry, the BBC insists that Worldwide is an independent, standalone body. But that obscures the commercial arm's huge and growing power over programming decisions. For instance, it chooses which programmes it wants its £81m contribution to be spent on, and in return gets the lucrative rights to overseas sales. Most goes on the marketable standards of "big factual programming, drama and children's shows", in the words of a spokeswoman.

All neatly packaged for the international market, no doubt, but not necessarily meeting the BBC's public service ethos.

"We have no say in the commissioning process," the spokes-woman also insists, although Worldwide's influence on BBC schedulers was hinted at in a leaked Worldwide memo earlier this year, which revealed that it was planning to tell BBC1 when to put on a new children's show, Ace Lightning.

Worldwide was anxious, it transpired, to "generate brand credibility" in order to maximise the number of toys it could flog to children and their parents off the back of it. A commercially wise decision, perhaps, but "not very BBC" was once again the verdict of the old guard.

BBC Worldwide has also been granted privileged access to the rights to any BBC programme – all of which, of course, have been publicly funded – rendering its rivals green with envy. A spokeswoman conceded that BBC Worldwide was the Corporation's "preferred market" for its programmes. "But the BBC's Commercial Agency, which was set up to handle this, will offer it around if it is thought we haven't offered enough."

Rivals say this hardly, if ever, happens, and that those programmes deemed potential moneyspinners abroad head straight for the BBC Worldwide portfolio. And independent producers constantly complain – although only under their breath to avoid Auntie's retribution – that they feel obliged to sign away their foreign distribution rights to BBC Worldwide as a "necessary evil" just to secure their commission on the main terrestrial channels.

Under Messrs Dyke and Gavin, the BBC is certainly changing fast. They used to say the letters stood for Be Bloody Careful. Now Be Bloody Commercial seems more the order of the day.