Not long ago, the Financial Times would have been the crown jewel of any media company, instantly conferring prestige and influence on its owner. Now, given the likely bidders, one of the world’s most respected and distinctive financial newspapers could end up as a trophy to help sell more computer terminals.
New York Mayor Michael Bloomberg is weighing the wisdom of buying the Financial Times Group, which includes the paper and half of The Economist, according to three people close to the mayor who refused to be identified discussing private conversations.
Bloomberg affinity for the paper, at least as a reader, has deepened lately. Its pages, once rarely seen in the thick stack of newspapers Bloomberg carries under his arm all day, have become a mainstay. Friends say he favors its generally short, punchy and to-the-point stories, which match his temperament.
In October, Bloomberg visited the London headquarters of the Financial Times, a few blocks away from Bloomberg LP’s giant new London complex, which is still under construction. When an editor asked if he would buy the paper, Bloomberg replied, “I buy it every day.”
He has spoken openly with friends and aides about the potential benefits and pitfalls of making such a costly acquisition in an industry he admires deeply as a reader, but sneers at as a businessman, these same people said. He is said to have recently taken to rattling off circulation figures and “penetration” rates for the paper.
Pearson, the parent company of The Financial Times Group, does not break out separate financial results, but analysts estimate that the newspaper loses money. A spokesman for the mayor declined to comment on his conversations about the paper.
For Thomson Reuters, the other likely bidder, the calculation is somewhat different. Unlike Bloomberg, who started his financial information company in 1982, James Smith, president and chief executive of Thomson Reuters, came up through Thomson’s regional newspapers and has ink in his veins.
However, the company has been hurt financially after its newest desktop terminal product struggled to catch on. In the first nine months of this year, the company reported revenue of US$9.88 billion, a 3 percent decrease from the period a year earlier.
Pearson is about to lose two of its top executives, raising speculation that the paper could be for sale. Analysts value The Financial Times Group at around US$1.2 billion, well within the reach of Bloomberg LP, which last year had revenue of US$7.6 billion, and Thomson Reuters, which posted revenue of US$13.8 billion.
Marjorie Scardino, Pearson’s longtime chief executive who once said the paper would be sold “over my dead body,” is departing on Dec. 31. Rona Fairhead, chief executive of The Financial Times Group, will leave at the end of April. Both executives had championed the print businesses. A successor to Fairhead has yet to be named, though one person close to the company pointed to John Ridding, the chief executive of the paper.
John Fallon, who is to take over from Scardino on Jan. 1 as chief of Pearson, rose through the educational business and does not share his predecessor’s fondness for print.
In an interview in October, Fallon said the Financial Times was a “valued and valuable” asset that would fit nicely into Pearson’s overall business. He added that “the portfolio of Pearson, it’s constantly changing and evolving” and “we never rule out anything.”