Fusion senior editor Felix Salmon writes in the New York Times that the purchase of the Financial Times by Nikkei will mean that the business newspaper should continue to thrive.
Salmon writes, “It is to the great credit of Pearson’s chief executive, John Fallon, that he understands how important it is that The Financial Times be owned by a news organization, rather than by an education company. ‘The best way to ensure the FT’s journalistic and commercial success,’ he said on Thursday, ‘is for it to be part of a global, digital news company.’ And it is to the great credit of Nikkei’s chief executive, Tsuneo Kita, that he is willing to write such a big check to help ensure a global, digital future for his company.
“The price that The Financial Times fetched could never be justified on a discounted cash flow basis: Mr. Kita isn’t buying some hugely valuable stream of future profits. Neither is he a whimsical billionaire buying up a prestigious brand in the hope that doing so will help elevate him among his jet-set peers. Instead, Mr. Kita has created a genuinely global news organization. He understands that any financial news company today needs to talk to people in all countries, and be able to do so on a straitened digital budget, rather than with the comfortable margins he’s used to. He also understands that Nikkei could never realistically get there on its own.
“It took The Financial Times 127 years to build the global reputation it has today. Now, as part of a news-focused organization, it can call upon Nikkei’s substantial financial and journalistic resources to extend that reputation even further. When Nikkei and The Financial Times were founded, financial news was a nationwide phenomenon, and they both found a lucrative business in selling high-end readers to national advertisers. Today, financial news is global, print newspapers are doomed, and advertising is becoming ever more narrowly targeted.”
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