This paper aims to explain the recent defensive strategy of downsizing at the BBC. The paper rejects the analysis of both industry practitioner and neoclassical economics academic critics who represent the corporation as an all-powerful, abusive player in a market and instead develops an alternative concept of the business model, which focuses the pressures of financial viability and stakeholder credibility to explain the restructuring. We argue that the BBC's business model is stressed because it struggles to deliver what key stakeholders want and expect from the corporation, from a pot of revenue that is limited by regulation. The BBC's problem is compounded by demands for more programming hours following its move into digital and by the increasingly formalized demands of regulators on behalf of an absent consumer. The paper concludes that without reflexive, business-model-centred regulation, it is likely that the BBC's business model will become unsustainable. © 2008 British Academy of Management.