The recent news that Channel 4 had purchased the Great British Bake off, from the incumbent BBC has created considerable controversy,

We decided to take a look at the value Channel4 may derive from the series for which it seems is commonly reported they will pay £25 million pounds per year across 3 years.

We decided to take a look at the likely value of the show based on our very accurate information on programme value, used by major studios, we took a look at the likely value the show would have for Channel4. Obviously on the BBC, Bake Off does not need to earn its way in terms of advertising revenues, however for Channel4 to demonstrate that they made a valued purchase they will need to reach a large audience.

The ten-part main competition has an astonishing audience and delivers ratings more than twice the level of even the most popular Channel 4 popular fact based programmes. Using our systems, we looked at the advertising revenue for top Channel 4 shows and adjusted for the increased audience and our estimate is that Channel 4 would earn £1.5 million per episode at net net rates from advertising.

There are of course additional programmes in the Bake Off mix, including in order of popularity Great Comic Relief Bake Off, Extra Slice, Masterclass and Junior. However these generate a fraction of the audience and will not alone make the show profitable for Channel 4.

Clearly there are additional opportunities for Channel 4 that were not available to the BBC. A creative sponsorship deal with a major retailer is the most obvious along with adding episodes to the main run. Both look to be a necessary part of Channel 4’s Bake Off if the franchise is to retain viewers and remain successful.  The enhancing and building up of the spin offs will help make the franchise more successful, longer running and profitable.

There is also a downside risk, it looks very unlikely that the BBC will leave the baking space alone and they should have access to most of the current presenters. Audiences may not transfer in their   entirety to Channel 4 as whatever the format may be they will be subject to a few commercial breaks per show. Indeed, the format may have already peaked at the BBC with some great personable winners and may be in decline.

Whatever else if the reported purchase price is correct, the BBC will be creatively thinking about is riposte, and Channel 4 will need to apply some serious commercial and creative thinking to pay dirt.