BBC Worldwide sells Lonely Planet to US-based NC2 Media
BBC Worldwide has sold Lonely Planet to US-based media company NC2 Media, owned by billionaire Brad Kelley.
BBC Worldwide said in a statement that it has sold the Melbourne-based publisher to NC2 Media for $75 million (£51.5 million), close to $114 million (£75 million) less than what the corporation paid for the business. BBC Worldwide will receive $60 million on completion of the sale, and a further $15 million in one year’s time. The sale is expected to be completed at the end of March, and the BBC said that Lonely Planet ‘will continue to function as a global operation’.
BBC Worldwide said that it has been ‘exploring strategic options for Lonely Planet over the last year’ and the corporation ‘was keen to find a new owner that could bring greater focus and capital to the business’. ‘NC2 Media demonstrated a commitment to invest in Lonely Planet and today’s announcement concludes the process to find the right buyer,’ said BBC Worldwide.
NC2 Media is based in Nashville, Tennessee, and is owned by billionaire Brad Kelley. The company is managed by executive director Daniel Houghton, who will take on the role of chief operating officer of Lonely Planet following the sale.
Houghton was quoted in the Age saying there was ‘no reason to believe at this point in time that (Lonely Planet) would exit Australia’. ‘Australia is the birthplace and the heart and soul of Lonely Planet … LP will continue to be committed to its roots in publishing and providing quality travel information for its customers.’
Interim BBC Worldwide CEO Paul Dempsey said in the same statement that the corporation ‘acquired Lonely Planet in 2007 when both our strategy and the market conditions were quite different’. ‘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 recognised 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.’
As previously reported by Books+Publishing, BBC Worldwide acquired Lonely Planet from its Australian founders Maureen and Tony Wheeler in two stages. The corporation acquired 75% of the Lonely Planet business in 2007 for £88.1 million (A$128 million), before acquiring full ownership from the Wheelers in 2011 for an additional £42.17 million (A$61.3 million). The Wheelers have since invested in Melbourne publisher Text Publishing.
During its ownership of Lonely Planet, BBC Worldwide wrote down the value of the business by £49.9 million ($72.6 million), citing the recent strength of the Australian currency and ‘challenging market conditions’. In July 2012, BBC Worldwide said it valued the Lonely Planet business at £85 million ($123 million). The business also relocated a substantial part of its web operations to the UK in 2011, affecting as many as 70 jobs at its Melbourne head-office.
According to a report in the Guardian, BBC Worldwide has been criticised by its governing body the BBC Trust for incurring a ‘significant financial loss’ in the sale of Lonely Planet.
The Guardian quoted a statement from the BBC Trust saying the purchase of Lonely Planet ‘did not prove to be a good commercial investment’ and that the organisation should learn from this experience.
‘Given the significant financial loss to Worldwide … we have asked the BBC executive to commission a review of lessons learnt and report to the Trust with its findings,’ said Diane Coyle, vice chairman of the BBC Trust and chair of the strategic approvals committee, in the statement.
Coyle also said that ‘although this did not prove to be a good commercial investment, [BBC] Worldwide is a very successful business; and at the time of purchase there was a credible rationale for this deal’.
Category: Local news