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BBC to sell Lonely Planet at £80 mn loss

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(Globalpost/GlobalPost)

The BBC's commercial arm is selling the Lonely Planet travel guide business to a US media firm at a loss of almost £80 million ($121 million, 93 million euros), the British broadcaster said on Tuesday.

NC2 Media will buy Lonely Planet, which publishes hugely popular travel guides in nine languages, for £51.5 million.

But the price is a massive 60 percent loss on the £130.2 million that BBC Worldwide spent acquiring the publisher in two chunks in 2007 and 2011.

The BBC Trust, the broadcaster's governing body, has ordered a review into the huge loss.

"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," said the Trust's vice-chairwoman Diane Coyle.

"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."

The BBC sparked controversy with its purchase of Lonely Planet because its commercial arm had previously been involved in selling BBC productions, rather than buying other firms.

The sale comes as Worldwide returns its focus to promoting BBC brands and programmes.

Lonely Planet has sold more than 100 million books since it was founded in the 1970s by two travel enthusiasts, husband and wife Tony and Maureen Wheeler.

Worldwide stressed that no taxpayers' money from the publicly-funded BBC had been used to buy Lonely Planet.

In 2011/12, £3.6 billion ($3.9 billion, 3 billion euros) of BBC funding came from the "licence fee" on households, while £222 million came from commercial operations.

An additional £277 million came from the British government to pay for the World Service international radio broadcaster and the BBC's global media monitoring wing.

But state funding for BBC Monitoring and the World Service will end in April 2013 and April 2014 respectively, as the government seeks to slash its budget deficit.

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http://www.globalpost.com/dispatch/news/afp/130319/bbc-sell-lonely-planet-at-80-mn-loss