So, how on Earth did the BBC allow its most popular TV series to be sold to one of its rivals?
The story of the £75million deal is a fascinating one and involves the central role played by TV productions chiefs Richard McKerrow and Anna Beattie, who devised Bake Off after being inspired by the rural baking competition at a village fete.
Despite four years in which they initially failed to sell the idea, ex-BBC runner Miss Beattie kept faith. The couple’s company, Love Productions, finally sold it to the BBC. It took time to develop from a niche BBC2 programme into a money-making machine.
The story of the £75million deal is a fascinating one and involves the central role played by TV productions chiefs Richard McKerrow (left) and Anna Beattie (right)
Their entree to the huge riches generated by the new deal came with the political debate about the BBC’s future and, in particular, the government White Paper earlier this year that called on the Corporation to stop chasing ratings at peak times.
BBC bosses then warned that some popular programmes could be at risk as the BBC had to find savings of £800million a year to help offset the cost of funding free licences for people aged over 75 from 2020.
It is against this context that the BBC started negotiating with Love Productions more than a year ago.
By this spring, it was clear that an impasse had been reached, amid widespread gossip about a possible purchase by ITV.
But how events unfolded stunned the BBC’s top brass, who are bitter that Channel 4 has poached a mainstream favourite when its remit says it should be ‘innovative, experimental and distinctive.’ Yet, of course, despite all Love Productions’ denials, the deal was ultimately all about the money.
Former BBC1 controller Lorraine Heggessey was shocked by what has happened. ‘In my day, there were often tough negotiations over programme budgets and budgets for talent but in the end there was an unwritten rule that you did not walk away and take your show somewhere else.
McKerrow was pictured leaving his home in Clapham this morning
Anna Beattie looked downcast as she left the house in South-West London
The couple's home in Clapham is worth £3.5million and they live in it with their three children
It is believed that the Beeb’s final offer of £15million a year was four times as much as it has been paying for the contract. But that was topped by Channel 4’s offer of £25million – or £75million over three years.
That £25million compares with the £16million paid by ITV to steal The Voice from the BBC and it is said to be greater than Channel 4’s entire budget for drama (although C4 denies this).
If correct, it means that only Britain’s Got Talent and The X Factor are more costly than The Great British Bake Off.
The success of GBBO will now transform the fortunes of McKerrow and Miss Beattie, who met while working on the Channel 4 show Grand Designs. They founded Love Productions in 2004.
McKerrow, who had commissioned the series Embarrassing Bodies when working at C4, had the stated aim to be bolder – maybe brasher – than the rest.
‘We’ve never chased ratings, we chase brilliant ideas,’ he told an interviewer. ‘You have to push boundaries, and that means you might do something that other people perceive as crossing a line.’
A key factor in the negotiations was the way that Channel 4 had handled another of their programmes – one that could not be more different from Bake Off, the notorious Benefits Street, a fly-on-the-wall documentary series which critics accused of demonising the poor and which turned one of the welfare-recipients, White Dee, into a national bogey figure.
Anna Beattie (right) pictured with other Bake Off crew members and Mary Berry and last year's winner Nadiya Hussein
Benefits Street attracted many protests although Channel 4 boss Jay Hunt, a long-time supporter, called it : ‘The sweet spot of public service broadcasting at its best. A perfect Channel 4 show.’
Now, that protection and support has been rewarded.
The follow-up, Immigration Street, was cut back to a single film rather than a series. Love felt that it could not guarantee the safety of the crew at one point.
Then came The Great British Bake Off, which was offered to Channel 4 before Danny Cohen, then in charge at BBC3, tipped off Janice Hadlow at BBC2 that it might be an idea for her. Following the huge success of Bake Off, Love has attempted to launch a version of it in America, which was not picked up. It is also trying to develop other shows for American networks.
Miss Beattie is the less dominant figure in the company, but McKerrow called her a ‘television genius’ in 2014 and said that she was the key reason they were successful.
Former BBC1 controller Lorraine Heggessey has said this would never have happened in her day
Plain-spoken, sometimes confrontational, McKerrow is a journalist-turned-TV executive who was educated at fee-paying Wellington College and who counts Ed Miliband as a friend.
There have been other tensions between Love Productions and some BBC managers.
There was conflict after viewers complained about product-placement over the prominence in Bake Off given to Smeg fridges. The appliances had been given to Love Productions by the manufacturers in exchange for publicity, an arrangement that breached BBC editorial guidelines. There was also tension over the show’s move from BBC2 to BBC1 in 2014. McKerrow said: ‘If it ain’t broke, don’t fix it, so my first instinct was, “Why do we have to move to 1?” ’
However, the gamble paid off in phenomenal style, attracting 15million viewers and winning awards.
Fans of the show have reacted with horror to the news that Sue and Mel won't be returning
It must have rankled that Love were only being paid around £3million a year, based on the original deal struck to show it on BBC2.
Everyone involved realised that there would be trouble when the contract came up for renewal.
Another problem for the BBC was how, as a public service broadcaster, it could best exploit the show’s huge commercial spin-off potential.
Veteran TV mogul Alex Graham said he suspected that the deal was not about value for money for licence-payers but ‘about BBC editorial policy making it difficult/impossible to properly monetise the brand’.
Admittedly, the series’ has lucrative spin-off arrangements with firms such as Lakeland and Sainsbury’s but there is much more commercial potential. Channel 4 should find it easy to get a company to sponsor the show in the way that phone firm Talk Talk pays £10million a year to sponsor The X Factor.
It's widely expected that the production company and Channel 4 will cash in on huge sponsorship deals
We shouldn’t forget that Channel Four had to fight off rival bids.
ITV controller Kevin Lygo apparently said that he would ‘kill’ to bring Bake Off to his network. Indeed, I’m told that ITV made a higher offer but was spurned because of Love’s close relationship with Channel 4.
The production firm also seems to have been won over by the opportunity to increase the investment in production costs – making extra films about the different baking creations and their history.
Meanwhile, the BBC can take comfort from the fact that its international arm, BBC Worldwide, has the rights to Bake Off until 2028.
It has secured 21 deals for the show to be made in other countries and has the global rights outside of North America.
But such issues are immaterial to viewers, whose only concern is that The Great British Bake Off doesn’t ever lose its charm.
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