The BBC and the US pay-TV company Discovery are understood to be in the final stages of agreeing a £1bn breakup of the Gold and Dave broadcaster, UKTV. UKTV, which has a mix of 10 free-to-air and pay-TV channels, is jointly owned by the Eurosport owner Discovery and BBC Studios, the commercial arm of the BBC.

The BBC has long sought to take full control of UKTV - which made more than £90m in profits last year and pays £54m annually for rights to BBC shows ranging from Top Gear to Dad’s Army.

Earlier this year, the BBC explored a buyout after a change of ownership clause in the joint venture contract was triggered by Discovery’s takeover of Scripps, the corporation’s previous partner in UKTV. The BBC, which does not have the financial flexibility to stage a buyout on its own, held talks with ITV and Channel 4, but the 90-day window to make a bid expired in June with no partner on board.
It is understood the BBC and Discovery have all but agreed a deal to instead break up UKTV, which has operated since the early 1990s, splitting the channels between them.

It is not clear how the mix of channels will be divided but those most filled with BBC archive content, such as Drama and Gold, would be obvious candidates to remain with the corporation.

If a final agreement can be reached, a BBC board meeting later in September is thought to be when the plan would need final approval.

In addition, talks between the BBC, Channel 4 and ITV about joining forces to create a British streaming service to combat the increasing power of Netflix and Amazon in the UK have been hampered in part by the uncertainty surrounding UKTV. Much of the blame for the delay has centred on the BBC splitting the video-on-demand rights to its programmes, with the corporation packaging up different deals for UKTV and others such as Netflix. Earlier this year, Virgin Media took UKTV’s channels off air, accusing the BBC of being a “linear dinosaur in an on-demand world” for holding back and splitting digital rights.
A breakup of UKTV would have major ramifications for Channel 4, which handles the broadcaster’s £250m-per-year TV ad sales contract. Channel 4 stands to lose potentially tens of millions of pounds in revenues, depending on what channels are secured by Discovery, which has its TV ad sales contract with Sky.