Today BBC Worldwide officials and representatives of U.S. billionaire Brian Kelley announced the sale of Lonely Planet to a company controlled by U.S. billionaire Brad 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.
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.
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.
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."
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 state that offices in Oakland, CA, Melbourne, and London will continue to operate as is.
According to friends of Kelley we have spoken to, any acquisitions he makes are always well thought out: He's incredibly thorough, doesn't overpay, doesn't do vanity buys, and looks at them long term. Sources say Kelley -- whose primary residence is now in Boca Grande, FL -- is more likely the second or third largest landowner in U.S., as he downplays his holdings and a lot of his deals to buy land never surface in media.
his sale finally comes after BBC has sat on a LP sale decision for a few years now, going back and forth on their thinking of what to do with the brand that it bought at an inflated valuation in 2007.
Having bought 75% of Lonely Planet at the height of the bubble in 2007 for $143 million, and the rest in February of 2011 for an additional $67 million, BBC has gone though various bouts of buyer's remorse over the years, but has not acted on it beyond writing down the value of its investment twice. The BBC most recently valued LP at about $135 million, down $78 million since it bought it. About a quarter of LP's revenues now come from digital -- which includes its various mobile apps as well -- and that's where it sees the future for the iconic travel brand.
BBC's thinking on the future of Lonely Planet has likely changed over the 2012 calendar year, in part spurred by its rethink on the future of its commercial efforts and the limits it has on exploiting a complementary Lonely Planet brand and BBC Travel in the UK. And there's also the disappointing reminder of how little its competitor -- and superior in the U.S. -- Frommer's went for in its sale earlier this year to Google.
-- Jason Clampet and Rafat Ali
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