BBC Lost £100m on Lonely Planet Guide Flop

[Teddy Bear]

From its very inception, the purchase of the Lonely Planet Guide by the BBC has been seen here as completely absurd and immoral. No doubt, the BBC viewed it as another vehicle to affect what people might think about various societies and countries round the world. As we noted here, it was far from complimentary to our own, but it's what we've come to expect from the BBC.

When the BBC eventually came to the realisation it was no longer worth maintaining this venture, it was thought that the subsequent sale had lost them £80 million. It now transpired that the actual loss was £100 Million.

It's also worth reminding readers that the man responsible for initiating the Lonely Planet purchase, John Smith, was awarded a £800,000 pay off when he subsequently left the BBC.

The BBC Trust has responded to the latest findings of the £100M loss by saying:
Diane Coyle, vice-chairman of the BBC Trust, said: ‘Mistakes were made in the acquisition and handling of Lonely Planet.

'The important thing now is that the lessons highlighted by this review are implemented, alongside broader improvements to the strategy and oversight of the BBC’s commercial operations.

'Lessons have been learned, blah blah blah'.
The BBC can continue ad nauseum to make all manner of mistakes and come back with the 'lessons have been learned' mantra. Any private company has only so many attempts to 'get it right', before there's no money left to 'learn lessons'. The BBC mindset, sucking at the never ending' public teat, can afford to keep getting it wrong, and rewarding themselves even greater benefits for doing so.

How much longer will the government and public allow this ridiculous situation to continue?

BBC lost £100m on travel guide flop: Corporation's commercial arm accused of getting 'carried away' with 'highly optimistic' plans for Lonely Planet series

• BBC Worldwide forced to sell the travel guide business at a huge loss
  
• The full scale of the loss is £20million more than was previously thought

By Alasdair Glennie

The BBC lost £100million in a disastrous takeover of the Lonely Planet travel guide business, an internal report has revealed.

In a damning analysis, the corporation’s governing body accused its commercial arm BBC Worldwide of getting ‘carried away’ with ‘highly optimistic’ plans to buy the struggling brand six years ago.

It was forced to sell the business to US-based company NC2 Media at a huge loss earlier this year, prompting an internal inquiry.

The full scale of the waste is £20million more than was previously thought because BBC Worldwide continued to inject funds into Lonely Planet despite the fact it failed to generate the expected profits.

The BBC Trust report criticised the Worldwide division for being ‘too aggressive’ in its forecasts, saying the potential for the travel guide to succeed as an online venture was ‘unproven’.

It added: ‘[BBC Worldwide] seemed to get carried away with the deal momentum and there should have been an effective mechanism in place to ensure that it did not end up over-paying.

‘Not enough downside analysis was done of the potential impact of a faster decline in books and of not achieving the very optimistic online forecasts.’

Lonely Planet was acquired for £132million when John Smith was head of BBC Worldwide. He left to become chief operating officer of Burberry last year with an £800,000 payoff.

BBC Worldwide paid for the firm - set up in 1973 by English engineer Tony Wheeler and his wife Maureen - in two chunks in 2007 and 2011.

It invested a further £20million in the business before selling it this year for £52million.

Diane Coyle, vice-chairman of the BBC Trust, said: ‘Mistakes were made in the acquisition and handling of Lonely Planet.

'The important thing now is that the lessons highlighted by this review are implemented, alongside broader improvements to the strategy and oversight of the BBC’s commercial operations.

‘It is important to view the significant financial loss from Lonely Planet against the backdrop of a sustained strong performance from BBC Worldwide as a whole, which brings significant benefits to licence fee payers.’

[steevo]

There is no guilt. It's time to FINALLY understand that Teddy Bear.

[Teddy Bear]

I know It must be my natural resistance to brainwashing kicking in overdrive and preventing me from 'getting it'.

[Teddy Bear]

Andrew Gilligan examines this, as well as other recent scandals and stories showing the many failures of the BBC.

What Lonely Planet is the BBC on?
£100m loss on travel book deal as corporation’s executives ride the gravy train

Andrew Gilligan

Tony and Maureen Wheeler, founders of the Lonely Planet travel books, guided an entire generation of backpackers to the cheapest banana pancakes in Chiang Mai.

What a shame the people who bought the Wheelers’ publishing empire didn’t take quite the same care with the contents of their moneybelts.
Last week, almost unnoticed by the media, the BBC published its investigation into the extraordinary scandal that was its purchase of Lonely Planet.

The Wheelers might have come back from their first overland trip, in 1973, with only 27 Australian cents in their pockets — but in 2007 the corporation’s commercial arm, BBC Worldwide, paid £90 million for a controlling stake in their company, even as its young customers moved online and the market in printed guidebooks collapsed.

Normally, the BBC makes the content – programmes or web pages – and BBC Worldwide sells it overseas.

But this deal relied on Worldwide, or Lonely Planet, making content, then getting the rest of the BBC to use it, which it was never going to do (it already had travel programmes, and Lonely Planet is based in Melbourne).

By 2011, as the investigation admitted, it was clear that BBC Worldwide had got “carried away” and that Lonely Planet had no hope of meeting its “highly optimistic” business forecasts. But that year, astonishingly, the BBC paid the Wheelers a further £42 million for their remaining 25 per cent stake — at “the original acquisition price” agreed in 2007, the investigation admits, “despite the significant under performance of the business”.

With a further £20 million invested in developing Lonely Planet, that made a total spend of £152 million.

In March this year, the BBC sold Lonely Planet for just £51.5 million, a £100 million loss. The person responsible for the deal left in December with an £800,000 pay-off. Why the corporation ever needed to own an Australian guidebook publisher in the first place has yet to be explained.

Last week, Lord Patten of Barnes, the BBC’s chairman, gave an interview to the New Statesman, protesting that the broadcaster’s recent severance pay scandal, when dozens of departing senior managers got a total of £6.8 million more than they were entitled to, was, though wrong, “not the most outrageous example I can think of mortal sin”.

To some, this sounded complacent – but it was, in one sense, true.
Compared with Lonely Planet and the slightly smaller but better-known fiasco of the “digital media initiative”, which wasted £98 million, mere single millions are small beer. Those two mistakes alone cost as much as the entire annual editorial budgets of five national newspapers put together. The digital media initiative was supposed to turn the BBC “tapeless,” but never worked properly and has now been scrapped.

On the day Baroness Thatcher died, BBC News couldn’t show archive footage until the boring old tapes, now banished to a distant suburb, had been brought in on the Tube by a member of staff.

The person responsible for the disaster was given a £140,000 bonus. Last week, too, it emerged that Lucy Adams, the corporation’s head of human resources, is having her libel action against the National Union of Journalists paid for by the BBC (she denies running a “dirty tricks” campaign against her own staff).

Miss Adams, who presided over many of the excessive pay-offs, is leaving after denying to Parliament all knowledge of an email about the payouts. She later admitted that she helped to write it.

Lord Patten protested that some newspapers had a “commercial” and “ideological” agenda in which the BBC got “bashed more than President Assad”.

No one at the BBC ever came close to Assad’s crimes, of course. But it is clear that, over the past few years, something has gone badly wrong at the top of the corporation.

There were cheers in the BBC newsroom when Miss Adams announced her departure. Just as in any Arab dictatorship, the BBC’s rulers have become a self-rewarding elite, a deadweight on their little broadcasting nation, who make their citizens — in this case, the corporation’s generally hard-working, underpaid staff — feel angry and ashamed.

As of April, despite £150 million worth of senior management pay-offs, there were still 437 of them, by the way — senior managers, that is; not unlike the Saudi royal family in extent, if not quite in riches.

Two hundred and forty-five — a number not including programme-makers, performers or journalists — make more than £100,000 a year. The Metropolitan Police, with almost treble the staff, only has 53. There is of course no comparison between the two organisations. How can protecting London from terrorists, murderers and rapists possibly compare with the onerous demands of supervising Cash In The Attic?

And though there is undeniably an ideological bias to the criticism, the corporation should be worried that it is starting to come from beyond the usual Right-wing suspects: from liberal newspaper columnists and, last week, from Roger Mosey, its own former head of news.

He suggested sharing the licence fee with other media to promote pluralism — an idea originally raised under Labour, then suggested again by Grant Shapps, the Tory party chairman, in The Sunday Telegraph three weeks ago.

The BBC’s “editorial voice”, argued Mr Mosey, “speaks too much as one to the exclusion of others. The BBC Trust speaks the language of diversity, but in its edicts it promotes conformity, whether it’s about an agreed approach to the science of climate change, “correct” terminology in the Middle East or the way a documentary about benefits should be “constructed”.

The “homogeneity” of the BBC’s news output, he said, was “intensified by regulation that sees there being 'right’ and 'wrong’ answers”.

For Mr Shapps and others on the Right, this was exemplified by the BBC’s attempt to disprove a Sunday Telegraph story about the large number of EU migrants without jobs — unfairly and inaccurately, in the newspaper’s view.

Some of what Mr Shapps said, of course, was the pre-election intimidation that all governments practise on the BBC. But there is more to it than that. Across the rest of the media, old advertising-based business models are crumbling. They can no longer support the plural, diverse media that we need.

The BBC, with its guaranteed tax-based funding, is ever more dominant. If it cannot become more pluralistic, and speak with a diversity of voices, then pluralism and diversity will have to be secured in other ways.
The question now is whether the opinion-former rebellion spreads to the TV-watching masses. In the end, that will depend on whether the BBC produces good enough programmes.

There is ominous evidence that the BBC’s lack of pluralism and layers of management are, indeed, stifling some of its output.

Perhaps the best external indicator of the BBC’s creativity and quality is how it does in the main broadcasting awards. The Sunday Telegraph has tallied the past five years’ worth of Bafta and Royal Television Society (RTS) and Sony radio winners — and the results are sometimes troubling. In many areas the BBC, it turns out, does not do quite as well as it should, given its utterly dominant position in broadcasting.

In the five sets of Bafta television awards since 2009, a total of 113 competitive domestic awards have been made. The BBC has won 62 of them, or just over half — not too bad, but it should probably have done better, given its vast disparity in resources over all its rivals.

It broadly dominates, as it always has, in comedy and does well, too, in entertainment. In drama, most years, it is matched or beaten by the commercial sector. Many of the most successful dramas of the past few years — such as Broadchurch and Downton Abbey — have been on ITV.
In radio, the BBC has won 64 per cent of the Sony gold awards over the past four years — again perhaps a little low, given that almost all “quality” radio in Britain is made by the Beeb. In the RTS television awards, it won 61 per cent. But the BBC’s most glaring weakness is in its journalism.

Over the past five years, in the RTS’s separate TV journalism awards, it has won just 39 per cent of the gongs, astonishingly low given that the BBC represents almost four-fifths of all TV news consumption in the UK.

At Bafta, the largest news organisation on the planet hasn’t won a single award for news coverage since 2006, and has only won it twice in the 12 years since the award was created.

It is, of course, news which suffers most from managerial interference, editorial timidity, and corporate centralism. And it is, of course, news, of all the BBC’s programmes, which politicians and other opinion-formers watch most.

The new regime under director-general Lord Hall has promised change.
But the number of managers is only coming down from 437 to a slimline 415 — by 2015. The BBC’s news bulletins, as the EU report suggests, show no sign of becoming less monotone.
The corporation may have to do more than that if it is to secure its future.