BBC Worldwide, the commercial arm of British pubccaster BBC, has sold Lonely Planet to an American billionaire at a loss.
The £51.5 million sale (US $77.8 million) to Nashville-based NC2 Media is nearly £80 million (US $120 million) below the £130 million that the BBC paid for the travel guidebook business in two phases in 2007 and 2011. The move follows a commercial review last year which set out the company’s strategy to focus on BBC brands and program content.
The size of the financial loss prompted the BBC Trust, the broadcaster’s oversight body, to ask its executive commission to review the deal and report its findings to the trust.
“Worldwide would not make this sort of acquisition again,” said Diane Coyle, vice chairman of the trust, in a statement. “Although this did not prove to be a good commercial investment, Worldwide is a very successful business; and at the time of purchase there was a credible rationale for this deal.”
The BBC’s acquisition of Lonely Planet was viewed as controversial because it shifted the company’s attention away from its broadcast focus at a time when the television industry was grappling with the impact of digital media on traditional outlets.
Founded in 1973, Lonely Planet is the world’s biggest publisher of travel guides. It has produced roughly 120 million books in 11 different languages and is the most popular guide book brand in the United States, Australia and the UK.
“We acquired Lonely Planet in 2007 when both our strategy and the market conditions were quite different,” said Paul Dempsey, BBC Worldwide’s interim chief executive, in a statement. “Since then, Lonely Planet has increased its presence in digital, magazine publishing and emerging markets whilst also growing its global market share, despite difficult economic conditions.
“However, we have also recognized that it no longer fits with our plans to put BBC brands at the heart of our business and have decided to sell the company to NC2 Media who are better placed to build and invest in the business,” he added.
NC2 Media is an American media company founded by former cigarette magnate and billionaire businessman Brad Kelley. It primarily creates, acquires and distributes digital content and develops new technologies to make that possible. The firm’s executive director, Daniel Houghton, will become Lonely Planet’s chief operating officer.
“With this acquisition comes a global footprint, not only in the travel guide business, but also in magazine publishing and the digital space,” said Houghton. “The challenge and promise before us is to marry the world’s greatest travel information and guidebook company with the limitless potential of 21st century digital technology. If we can do this, and I believe we can, we can build a business that, while remaining true to the things that made Lonely Planet great in the past, promises to make it even greater in the future.”
The sale will occur at the end of the financial year on March 31.