Japan’s Nikkei media group has announced it is buying the Financial Times from Pearson for £884m. One of Japanese company’s English-language magazines, Nikkei Asian Review, quoted Tsuneo Kita, chairman and chief of Nikkei:
I am extremely proud of teaming up with the Financial Times, one of the most prestigious news organizations in the world. Our motto of providing high-quality reporting on economic and other news, while maintaining fairness and impartiality, is very close to that of the FT. We share the same journalistic values. Together, we will strive to contribute to the development of the global economy.
The FT was founded in 1888, a dozen years after Nikkei. Both gave their names to their country’s main stock market indices, the Nikkei 225 and the FTSE 250. However, while Nikkei has also concentrated on publishing to build a paper that sells 3 million copies a day, the FT was bought up by Pearson, a company that was founded on road-building and developed into a conglomerate based around owing leading brands. It has bought and sold an astonishing range of companies. At one time, Pearson controlled the French vineyard Chateau Latour (which it sold to brewer and distiller Allied Lyons), merchant bank Lazard, Waterford glass, Wedgwood China, Alton Towers, Madame Tussaud wax works, Warwick Castle, the production company behind Australian TV soap Neighbours, Thames TV, multimedia developer Mindscape, Future Publishing, an oil services group, Penguin and Dorling Kindersley. In recent years, Pearson has placed famous educational publishing names such as Longman, Prentice-Hall, Addison-Wesley and Pitman under the Pearson Education branding. Marjorie Scardino, who made her name running the half-FT-owned Economist, focused the group, but famously said Pearson would sell the FT ‘over my dead body’. She was in the job for 16 years, saw Pearson through the dotcom boom and bust, and left having doubled the share price – a record that compares well with peer companies. John Fallon, her successor from January 2013, showed little enthusiasm for the paper, however, and is seen as having starved the FT of investment while messing up the rest of the now education-based Pearson. Within a year of Fallon taking over, the share price dropped sharply and 30 months later has barely recovered to what it was at the start of his tenure in 2013. In that time, peers such as the Daily Mail group has put 60% on its share price; RelX (Reed Elsevier) 70%; and Wolters Kluwer 80%. The deal with Nikkei does not include the half stake in the Economist, but does cover the FT‘s magazine arm, which includes Investor’s Chronicle. In all the takeover chatter, there has been much talk of the FT‘s independence. Strangely, the FT is the only paper that vaunts its owner’s name on its front page, a valuable form of free advertising that Pearson is now sure to lose. Also, it will have to start paying the FT for the use of its brand on the scores of management books it publishes under the paper’s imprint. The loss of such a big British-based asset as the FT again raises the question – often asked of the Texan Scardino early in her tenure – of whether Pearson might up sticks for the US, where most of its sales now lie. It will also be interesting to see whether the paper’s Lex column starts to write about Pearson – a ban that has been described as ‘self-imposed’ but dates back to the ‘aluminium war’ of 1959 involving a takeover battle for British Aluminium. Lex sided against the view of Lazard, the blue-blooded merchant bank in which Pearson, which had only recently bought the FT, had a big stake. It caused a big stink at the time. The Lex writers seem to have taken the view that discretion is the better part of valour when it comes to your owners. A view has been expressed that the lack of coverage in what was once the column that laid down the law on the City has held back Pearson’s share price. Will Lex cover Nikkei I wonder?