BBC Buys Lonely Planet: Implications for Media Sector

Interesting to see that BBC Worldwide has bought travel content company Lonely Planet. The deal gives a couple of data points for content purchases, so let's play with 'em.

Lonely Planet has two main businesses: print publishing and web content/community. Assume that the company's publishing business does around $80m, which is a small boost on its 2001 sales. On the other side of the LP house, Lonely Planet's website gets 4.3-million unique users. Let's also assume the publishing side of company has 5% net margins (which is charitable). Finally, BBC says the deal was "comfortably" under its $175m cap for acquisitions, so let's guesstimate a value of $100-$150m for the buy.

With the preceding assumptions, the deal was done at about 1.1x-1.4x publishing sales, or 30x-ish publishing earnings. With a more typical publishing industry earnings multiple at closer to 12-15x earnings, then the balance is for the Lonely Planet's web properties, thus according a $60-ish million to Lonely Planet's 4.3-million web site uniques.

Granted, lots of assumptions here, but it's at least worth a ponder. Other thoughts?

Comments

[ben allen]

Dont know much about traditional publishing side, why just a small revenue improvement in 6 years!?

I'd say that that LP.com should be able to earn $3-4 per average monthly unique through online premium display ads alone or $13-17 million per year... and maybe another .1 - .2 for an adsense program, not including online/digital content syndication/licensing.... or a 4x revenue multiple at most... damn near bargain in todays marketplace.