The BBC's taking over the (Lonely) Planet

BBC Worldwide is paying £42m to complete its purchase of Lonely Planet - while Bauer may be drawing its BBC Magazines division into its orbit...

by Dave Waller
Last Updated: 21 Feb 2011

BBC Worldwide is forking out $42m to acquire the 25% of the Lonely Planet that it didn’t already own, having snapped up 75% of the travel guide publisher in a £88.2m deal back in 2007.

The BBC's commercial arm described that initial deal as its largest ever, part of the BBC’s strategy to compete across platforms with the world’s largest media companies. But it looks like a case of one in, one out for the Beeb Worldwide: its BBC Magazines stable, which includes the Radio Times, Top Gear and Gardeners' World, could be heading to Bauer. The German publisher has emerged as favourite among the potential suitors, and BBC Worldwide says it expects 'firm but non-binding' offers to be tabled by the end of the month.

Commercial activity at the BBC tends to sit uncomfortably in the spotlight. BBC Worldwide's foray into the travel trail was no exception: disgruntled from Grimsby complained that buying the Lonely Planet was a weird misuse of taxpayers’ cash, while media companies like Time Out and Guardian Media Group argued that the BBC’s commercial wing had no right to go beyond its remit of harnessing BBC programmes or content. The argument was that the behemoth was acting in a way that was harmful to other private businesses.

The move prompted the BBC Trust into defensive mode, promising to rein in future excesses and concluding that Worldwide shouldn’t repeat this kind of acquisition again unless there were ‘exceptional circumstances’. While letting the Lonely Planet deal go ahead.

The latter's recent performance hasn't exactly been encouraging: thanks to rough trading conditions after the acquisition, the operation reported a £3.2m loss in the year to the end of March 2009. So, a bad time for people to imagine their licence fee being used to highlight cheap falafel joints for hungry backpackers?

To be fair, things have picked up since then. Digital revenues rose 37% year-on-year in the 12 months to the end of March 2010 – and spin-off products such as a Lonely Planet magazine have pushed the business back into the black, with profits of £1.9m. Non-print revenues have grown from 9% of the total in 2007 to 22% in the year to March 2010.

It's also now got 8.5m unique users for lonelyplanet.com and 140 apps, which demonstrates two things: one, that the Beeb's online expansion plans for the Lonely Planet have clearly taken off; and two, that travelling's changed a lot since our day. Guidebook apps on your phone? C'mon! How does anyone get entertainingly lost these days?

For LP's founders, Tony and Maureen Wheeler, it was time to hike out of the office for the last time - but not before trotting out an emotional address at the offices, with lots of teary chat about the guide book empire being their ‘child’. But it's Auntie's baby now.

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