Friday, July 21, 2017

Notations From the Grid: From Our Archives On "Media Watch" w/ BBC & FT


NIKKEI BUYS THE PINK PAPER The Japanese media company Nikkei trounced the German group Axel Springer to buy The Financial Times, Ravi Somaiya, Jonathan Soble and David Jolly report in DealBook. Pearson, its parent company, had been discussing the sale with Financial Times executives for about a year, but there was a last-minute race to close the deal on Thursday, in which Nikkei trumped the competition with a $1.3 billion offer.

Axel Springer had set its sights on the British news group early on and had been in talks until just 15 minutes before the announcement, The Financial Times reports.

The sale dwarfs other newspaper deals: Two years ago, The Washington Post sold for $250 million and The Boston Globe was sold for $70 million along with its other media assets. The Financial Times sale does not include Pearson's 50 percent stake in The Economist or The Financial Times's central London building, which Nikkei will rent from Pearson.

The divestment allows Pearson to intensify its focus on the educational publishing business, which provided about three-quarters of its profit last year. The group has traditionally been a hands-off owner, and the FT has rarely been an investment priority, The Financial Times reports. Senior FT managers were becoming frustrated as they fought for greater investment to boost its digital efforts.

Jennifer Saba argues in Breakingviews that Nikkei is paying a hefty sumfor a group in an industry with an insecure future. At such a lofty price, Ms. Saba writes, Nikkei will have to work extraordinarily hard to make the numbers stack up. "Nikkei might also try to recover some of the money through cost cuts. But that, in the long term, might diminish The Financial Times's reputation, which Nikkei has paid so much money for."

In spite of this premium price, Felix Salmon writes in a New York Times Op-Ed that the Financial Times is in good hands and that Nikkei is likely to be a better owner than Pearson because news, not finances, will come first.

No comments: