Lonely Planet, the storied travel guidebooks publisher owned by BBC, is about to be sold, we have learned. And the buyer is a doozy: reclusive Kentucky billionaire Brad Kelley, who spent the 1990s selling discount cigarette brands like USA Gold, Bull Durham, and Malibu, then sold the company for almost $1 billion in 2001, and parlayed that money into becoming the one of the largest land owners and conservationists in United States.
The deal is in final stages of negotiation, and barring any big red flags that come up the last second it should be announced next week.
The deal terms, according to our sources: Kelley will buy a majority controlling stake in Lonely Planet, and BBC Worldwide, the commercial arm of BBC which bought LP, will retain a small-but-sizable stake to help maintain editorial control through current management, as well as save on inter-country taxes.
The sale price is apparently higher than what BBC currently values LP at — that is why it is selling the majority stake, of course, no one else will pay that much — but still way below what BBC originally paid for it, which was a total of $210 million spread over roughly four years starting in 2007. In July 2012, BBC Worldwide did a second write down and valued it at $135 million. The value may be even lower now based on flagging book sales numbers. With a majority stake, the price Kelley is paying will likely be close to $100 million, but the exact number will likely to be revealed in BBC’s annual review statements that usually come out after March.
Updated: BBC Worldwide’s official statement: ”We have been exploring strategic options for Lonely Planet for some time now but no deal has been done and we are not going to comment on speculation about its future.”
Kelley’s motivations
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., not fourth as WSJ reported in a rare story on him last year (video from story embedded below), as he downplays his holdings and a lot of his deals to buy land never surface in media.
What Kelley and his team plans to do with Lonely Planet is confounding insiders — including the irony that a historically environmentally forward-thinking brand like LP will now be owned by someone who made a fortune with cigarettes and now is a land-buying environmental conservationist.
With LP, Kelley’s team is likely thinking of the long-term value of the brand and investing in digital — especially video — and possibly going into offline retails channels and using it as a environmental conservation platform.
Kelley is an investor in a small travel startup called OutwildTV, a website using video to document the adventures of travel journalists. It is unclear what role OutWild, or its founder/principal Daniel Houghton and other principal Michael Rosenblum will have after in the new Lonely Planet under Kelley’s control, but Houghton and Rosenblum have been Kelley’s point men on all discussions with the BBC up to this point.
Considering how guarded Kelley is — he doesn’t have a public email, has hardly ever been photographed — it is likely OutWild principals may serve as the point people for his LP stake.
Continue reading about BBC's history with Lonely Planet on Skift >
Read more about Lonely Planet and the rapid decline of the printed guidebook on Skift >
A version of this post originally appeared on Skift and is republished with permission.