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.
Michael R Bloomberg is weighing the wisdom of buying The Financial Times Group, which includes the paper and a half interest in The Economist, according to sources.
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.”
For Thomson Reuters, the other likely bidder, the calculation is somewhat different. Unlike Bloomberg, who started his financial information company in 1982, James C Smith, president of Thomson Reuters, came up through Thomson’s regional newspapers and has ink in his veins. But the company has been hurt financially. It reported revenue of $9.9 billion, a 3% decrease from the period a year earlier.
The Financial Times could expand the Thomson Reuters brand and give its reporters more exposure since, unlike Bloomberg, which bought Businessweek in 2009, the company does not own a regular magazine.
But first, the paper needs to be put on the block. Pearson is about to lose two of its top executives, raising speculation the paper could be for sale.
Analysts value The Financial Times Group at about $1.2 billion, well within the reach of Bloomberg L.P., which in 2011 had revenue of $7.6 billion, and Thomson Reuters, which posted revenue of $13.8 billion.
Marjorie Scardino, Pearson’s chief executive, who once said the paper would be sold “over my dead body,” is departing on December 31. Rona Fairhead, chief executive of The Financial Times Group, will leave at the end of April. Both executives had championed the print businesses.
However, John Fallon, who is due to take over from Scardino on January 1, does not share the fondness that his predecessor had for print.
In an interview in October, Fallon said The Financial Times was a “valued and valuable” asset that fit nicely into Pearson’s overall business.
Charles Goldsmith, a spokesman for Pearson, said in an e-mail that the company “has not initiated any sort of sale process for The Financial Times and has no plans to do so.”
Even before the departures at Pearson, Bloomberg L.P. had commissioned a study to assess whether The Wall Street Journal, The New York Times or The Financial Times would potentially become available. Of these, only The Financial Times emerged as a possibility, according to sources.
Officials at Bloomberg L.P. said top executives had only discussed a possible deal for The Financial Times in hypothetical terms, awaiting a decision from Bloomberg, who controls 90% of the company’s shares.
“Only one person makes the decisions about acquisitions and that’s Mike,” one executive said. A Bloomberg spokesman declined to comment.