The most recognizable travel brand in the world just sold for less than half of what it was worth two years ago despite growing revenues. Here's hoping the new ownership will be able to better harness the brand's tremendous value.
Today BBC Worldwide officials and representatives of U.S. billionaire Brad Kelley announced the sale of Lonely Planet to a company controlled by Kelley for AUS$75 million (£51.5 million).
The announcement confirms Skift’s widely reported scoop from two weeks ago about the sale and the buyer. Staff at Lonely Planet’s Melbourne headquarters was informed of the deal on Tuesday evening at 5pm to co-incide with an exclusive promised to the UK’s Guardian newspaper. Kelley representative and new Lonely Planet Chief Operating Officer Daniel Houghton was in attendance with Marcus Arthur, BBC Worldwide Managing Director of Global Brands.
According the terms of the deal the BBC Worldwide, the commercial arm of the British public broadcaster, is selling the travel brand to NC2 Media, a new Nashville-based digital media company owned by Kelley and run by Daniel Houghton and Michael Rosenblum. Lonely Planet CEO Matt Goldberg is stepping down from his post.
More on Lonely Planet:
- Exclusive: BBC selling Lonely Planet to Kentucky cigarette billionaire Brad Kelley
- Lonely Planet and the rapid decline of the printed guidebook
- How Lonely Planet is winning the battle on social media
BBC Worldwide and NC2 Media issued a joint statement which read in part:
BBC Worldwide has been exploring strategic options for Lonely Planet over the last year and 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.
NC2 Media is a US based media company primarily engaged in the creation, acquisition, and distribution of quality digital content and the development of the technologies that make this possible. The company is poised to leverage the opportunities presented by the changing landscape within the industry. The business is headquartered in Nashville Tennessee, and led by Daniel Houghton, its executive director, who will take on additional responsibility at Lonely Planet as its Chief Operating Officer.
Paul Dempsey, Interim CEO BBC Worldwide, says: “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. This deal begins a new chapter for Lonely Planet and signifies the end of one for BBC Worldwide.”
Daniel Houghton, Executive Director of NC2 Media commented: “With this acquisition comes a global footprint, not only in the travel guide business, but also in magazine publishing and the digital space. We are very excited about this opportunity, and delighted to agree this deal with BBC Worldwide. 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 BBC Worldwide had paid a total of £130.2 million over four years to buy Lonely Planet. This selling price represents nearly an £80 million loss in value during the BBC’s ownership. This is despite an increase in both revenue and profit during the period. According to the BBC, “during the time BBC Worldwide has owned Lonely Planet its annual revenue has grown from £810m in 2007 to £1.08bn in 2012 – with profit increasing from £111m in 2007 to £155m in 2012.”
The BBC Trust issued a statement criticizing BBC Worldwide’s decision and the loss in value, stating “”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.”
Early reports stated that offices in Oakland, CA, Melbourne, and London will continue to operate as is, but sources in London say that the Australia office will be eventually be closed and the majority of the business moved to the United States.