BBC Worldwide is paying A$67.2m (£42.1m) to acquire the 25% of travel guide publisher Lonely Planet that it does not already own.
Tony and Maureen Wheeler, who co-founded the Australian travel publisher in 1973, have exercised a put option on their remaining stake as agreed when the controversial deal for the BBC’s commercial arm to buy 75% of the company was struck in 2007.
“The put option enabled us to benefit from the Wheelers’ experience over the last three and a half years,” said Marcus Arthur, chairman of Lonely Planet and managing director of BBC Worldwide’s global brands division. “They have supported Lonely Planet’s ongoing migration from a traditional book publisher to a multi-platform brand.”
In October 2007, the corporation acquired a 75% stake in Lonely Planet for £88.1m, a move that sparked widespread criticism from rival media companies – including Tony Elliott’s Time (NYSE: TWX) Out and Guardian Media Group, which publishes MediaGuardian.co.uk – that it was going well beyond its remit of focusing on exploiting BBC programmes or content.
While senior management has always defended the decision to buy Lonely Planet, the acquisition resulted in the BBC Trust ruling that the corporation’s commercial arm must not undertake similar acquisitions in the future unless there are “exceptional circumstances”.BBC Worldwide has grown the Lonely Planet business significantly following a difficult time after the acquisition when poor trading conditions led the operation to report a £3.2m loss in the year to the end of March 2009.
A strategy to grow non-print revenues – 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 has pushed the business back into the black with profits of £1.9m.
Lonely Planet’s non-print revenues have grown from 9% in 2007 to 22% in the year to the end of March 2010, with a digital presence that includes 140 apps and 8.5 million unique users for lonelyplanet.com, home of the Thorntree travel forum.
Peter Phippen, the managing director of BBC magazines, described Lonely Planet magazine as the “star of the show” among the division’s titles in terms of the latest Audit Bureau of Circulations figures for the second half of 2010, published yesterday.
Lonely Planet magazine, which launched in 2008 and now has eight editions in print globally, reported a 33.4% year-on-year increase in circulation in the UK and Ireland. The title, which had a circulation of 60,106, also grew 9.9% period-on-period.
The company publishes more than 500 travel-related titles as well as producing TV programming such as Lonely Planet Six Degrees for Discovery Networks.
This article originally appeared in MediaGuardian.