BBC to Sell Lonely Planet Travel Guidebooks

In 2007, when the British Broadcasting Corp. bought the Lonely Planet travel guidebooks, it drew criticism from rivals for using public money to expand into areas better left to the private sector.

On Tuesday, as the BBC confirmed plans to sell Lonely Planet to a reclusive American billionaire, it drew internal scrutiny — this time for losing public money on the sale.

BBC Worldwide, an arm of the public broadcaster than runs many of its international and for-profit operations, said Tuesday that it had agreed to sell the series to NC2 Media, a company controlled by Brad Kelley, a businessman from Kentucky who made a fortune in tobacco and later turned his attention to real estate and other interests.

The price, £51.5 million, or $77.3 million, was nearly £80 million below the £130 million that the BBC paid for Lonely Planet in two stages. The scale of the loss prompted the BBC Trust, a panel that oversees the broadcaster, to call on the executive arm of the BBC to “commission a review of lessons learnt and report to the Trust with its findings.”

“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,” Diane Coyle, vice chairwoman of the trust, said in a statement.

At the time of the purchase, the BBC — then headed by Mark Thompson, who is now chief executive of The New York Times Company — talked about extending the Lonely Planet brand into new areas, including digital outlets. But publishers of traditional travel guidebooks have struggled to compete with travel sites on the Web, like TripAdvisor.

Meanwhile, rivals of the BBC complained that the broadcaster had no business moving into new areas at a time when some commercial media companies have struggled with the challenge of the Internet.

In 2009, James Murdoch, then the head of the European and Asian operations of News Corporation, described the BBC’s purchase as a “particularly egregious example of the expansion of the state.” In addition to its other media holdings, News Corporation is the largest shareholder in British Sky Broadcasting, a pay-TV company that competes with the BBC.

The BBC has been scaling back since it agreed to a reduction in its public funding — which comes from a license fee on television-owning households — in 2010.

“Lonely Planet has increased its presence in digital, magazine publishing and emerging markets whilst also growing its global market share, despite difficult economic conditions,” said Paul Dempsey, interim chief executive of BBC Worldwide, in a statement. “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.”

Despite the challenges facing travel publishers, the BBC said Lonely Planet is the biggest travel guidebook series in the United States, Britain and Australia, where the title was founded in 1973 as a bible for backpackers. It said 120 million books have been published in 11 languages, and 120 million people visit its Web sites annually.

“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,” Daniel Houghton, executive director of NC2 Media, said in a statement. “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 purchase is a big expansion of Mr. Kelley’s media holdings; he also has an investment in OutWild TV, a Web site that shows travel videos. Mr. Kelley is said to be one of the largest private landowners in the United States, with millions of acres of ranch land in Texas and other states.

Article source: http://www.nytimes.com/2013/03/20/business/media/bbc-to-sell-lonely-planet-travel-guidebooks.html?partner=rss&emc=rss