The logic of Thomson Reuters buying the FT
Michael Wolff writes — in the aftermath of a meeting he had with a Thomson Reuters executive — for The Guardian about how it would be good if Thomson Reuters acquired the Financial Times from Pearson.
Wolff writes, “Of course, there is the FT to consider – and the hopes and ambitions of its parent, Pearson. The best source I know with a view into the high corporate levels of Pearson, whom I call immediately after lunch, demurs: ‘The FT will be sold. But she won’t sell it.’ She being Marjorie Scardino, the present, seemingly-always-embattled CEO, and former newspaper editor, who has repeatedly defended ownership of the FT, even as Pearson has turned ever more into an education company.
“Back to my original source, now settled in at the office: ‘How solid is this?’ After the sinking sensation of realizing that foot may have been put in mouth, the source shuts the office door and says: ‘Solid. Solid. Really. Still at an informal level of conversation …’ – a slight retreat – ‘but in clear discussions.’ In other words, even if true, it could be a business lifetime until an agreement. Still. The logic of a deal can almost be as good as a deal.
“There are four companies that dominate the brand name financial information business: Pearson with the FT, News Corp with the WSJ, and Bloomberg and Thomson Reuters with their myriad assets. The latter two make their money and vast margins in this business. The former make their money in other businesses and maintain a foothold in financial information and news for mostly extra-business reasons. It is certainly true that neither Bloomberg nor Thomson Reuters need a newspaper – and yet it is true, too, that it could change the game were one of them to get a major financial news organ (so much so that each would probably do what is necessary to try to prevent the other from getting one – vastly enhancing the value of both the FT and WSJ). Indeed, while neither Pearson nor News Corp are ever going to turn the FT or WSJ into significant earners, Bloomberg and Thomson Reuters, with their back-end financial information resources, might be able to build a powerful and profitable financial news front end.”
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