July 24, 2015
Going, going, gone! The rush sale of The Financial Times
by Zeljka Marosevic
The Financial Times newspaper was sold yesterday to the Japanese financial media group Nikkei. The FT had been owned by Pearson Publishing Group, one of the biggest players in the publishing industry.
Who is Pearson? As well as owning many educational subsidiaries, which makes it the largest educational publisher in the world, Pearson owns a 47% stake in Penguin Random House. In fact, Pearson owned Penguin before entering into the merger with the German goliath Bertelsmann, which owned Random House.
Yesterday’s sale advanced quickly. In the morning there were rumours that Pearson was in ‘advance talks’ with a potential buyer for the newspaper. By lunchtime, there was strong speculation that it would be bought by the German publishing group Axel Springer. But by close of play it was announced that Nikkei had purchased the newspaper group for an estimated £844m, in what the FT has called “an eleventh hour offer”. Axel Springer “did not know it had been trumped by Nikkei until 15 minutes before the cash-rich Japanese company’s deal with Pearson was announced.”
The sale did not include the FT’s current headquarters at 1, Southwark Bridge, nor the 50% stake in The Economist that Pearson also owns.
According to The Guardian:
Journalists within the FT were shocked at the unexpected deal, with Axel Springer widely tipped to be the buyer until hours before the official announcement. One insider said there was “chaos” ahead of an address to staff by editor Lionel Barber. There was also concern among journalists at where they would be based, with the sale of not including the paper’s current HQ at 1, Southwark Bridge.
One of the newspaper’s journalists told The Guardian:
“It is safe to say we are very concerned about this development. It’s been announced very quickly. There was talk of both potential buyers [Axel Springer and Nikkei] but there wasn’t time enough to form an opinion.” Staff were called to a briefing at 4pm.
For a newspaper that specialises in reporting on business and finance, it must have come as a surprise to be left out in the cold when it came to its own sale.
Pearson’s reasons for the sale are apparently two-fold. They don’t think they can keep up with the impact that digital and social media is having on print journalism, and presumably aren’t interested in the investment that that would involve. CEO of Pearson, John Fallon, told The Guardian that “the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company.”
What Pearson does want to invest in, however, is education publishing. But it’s been a tough year: in July 2014 it cut 10% of the company’s workforce. Fallon again:
Pearson will now be 100% focused on our global education strategy. The world of education is changing profoundly and we see huge opportunity to grow our business through increasing access to high quality education globally.
The former CEO of Pearson, Marjorie Scardino, famously stated that the newspaper would be sold “over my dead body”.
Zeljka Marosevic is the managing director of Melville House UK.