The BBC Trust has asked senior management at the BBC to order a review into lessons learnt from the loss-making sale of Lonely Planet, which was announced this morning.
BBC Worldwide, the commercial arm of the BBC, said it will sell travel guides business Lonely Planet to NC2 Media for an initial consideration of £41.2 million (US$62.2 million) with £10.2 million to follow.
The deal means Worldwide will get £51.5 million for an asset for which it paid £130.2 million.
The decision to sell the business follows last year’s review of Worldwide’s activity by the Trust, which oversees all activity at the BBC. It called for Worldwide to rein in non-core activities. It also, subsequently, approved the sale of Lonely Planet.
In the immediate aftermath of the deal, Diane Coyle, BBC Trust vice chairman and chair of the Strategy and Approvals Committee, said: “The Trust’s strategy for Worldwide now is to focus on BBC programme content, and Worldwide would not make this sort of acquisition again.”
Lonely Planet was not a good commercial investment, she added, conceding that at the time it was acquired in 2007 there was a rationale for the deal. The Trust has now asked for a report into the Lonely planet deal.
Coyle said: “Given the significant financial loss to Worldwide, however, we have asked the BBC Executive to commission a review of lessons learnt and report to the Trust with its findings.”
Lonely Planet revenue grew from £810 million to £1.08 billion under Worldwide’s ownership and profit increased from £111 million to £155 million.
Worldwide said that it 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 is a digital content business based in Nashville in the US. Its executive director, Daniel Houghton, will become COO of Lonely Planet once the deal is finalised.
Paul Dempsey, interim CEO BBC Worldwide, said market conditions and company strategy had changed since it acquired Lonely Planet in 2007. He noted it had grown its business under Worldwide’s stewardship, but added the sale marked the end of a chapter for the organisation. “This deal begins a new chapter for Lonely Planet and signifies the end of one for BBC Worldwide,” he said.