BBC sells Lonely Planet and makes loss of £80m

The BBC Trust has ordered a review to examine a deal which has led to the corporation’s commercial arm selling off travel guide firm Lonely Planet for almost £80 million less than it paid.

BBC Worldwide will sell the company, which is the biggestselling brand in the UK travel guide market and hugely popular around the world, for £51.5 million to US-based NC2 Media.

That marks a huge 60 per cent reduction on the £130.2m it paid in total acquiring the firm in two chunks in 2007 and 2011.

The Trust yesterday called it a “significant financial loss” as it commissioned the BBC Executive to look into “lessons learned” from the losses.

The purchase was long seen as a controversial move because, until it took on Lonely Planet, Worldwide had mainly been involved in exploiting BBC productions, rather than buying up other firms.

Yesterday’s sale, which has been approved by the BBC Trust, comes as a result of refocusing Worldwide’s activities and primarily promoting BBC brands and programmes. The continued ownership of Lonely Planet no longer fitted with the strategy and is being seen as closing a chapter in Worldwide’s history.

Paul Dempsey, the interim chief executive of BBC Worldwide, said: “We 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.”

Worldwide has said no licence fee money was ever used for its purchase of Lonely Planet – buying 75 per cent of the brand for £88.1m, and the remainder four years later for £42.17m.

Diane Coyle, vice-chairman of the BBC Trust, said: “Worldwide would not make this sort of acquisition again. 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. Given the significant financial loss to Worldwide, however, we have asked the BBC Executive to commission a review of lessons learned and report to the Trust with its findings.”

Over the past three years the value of Lonely Planet had been written down by £67m to allow for the impact of changes in the foreign exchange market, in particular the strength of Australian currency.

A BBC Worldwide spokesman said: “The financial losses we incurred were the result of external factors beyond our control.”

Worldwide also pointed to its successes in boosting the coffers of the BBC. It said it had contributed £875m to the corporation in the time it has owned Lonely Planet, through brands and programmes such as Doctor Who, Top Gear and Strictly Come Dancing.

During its ownership, digital revenue for Lonely Planet has grown from 9 per cent to 27 per cent, and it has launched books in Russia, Brazil, India and China and printed around 120 million books in 11 languages.

Daniel Houghton, executive director of NC2 Media, said: “The challenge and promise before us is to marry the world’s greatest travel information and guidebook company with the potential of digital technology.”