…Sale by Pearson does not include 50% stake in the Economist or the newspaper’s Southwark Bridge headquarters
…Lionel Barber: ‘It’s adapt or die frankly and that’s what we’re doing
The 127-year-old Financial Times, whose pink pages are as much a symbol of the City as the pinstriped suit, is to be sold to a Japanese financial media company by its British owners for £844m.
The sale to Nikkei by Pearson, which comes after years of speculation over its long-term commitment to owning the FT, demonstrates the eagerness of cash-rich international investors looking to expand into a financial news landscape dominated by the English language.
Pearson, which bought the FT in 1957, said it had decided to sell in order to focus on its far larger educational publishing business in the US. John Fallon, Pearson’s chief executive, said: “Education and journalism are both great and noble callings but they are not the same thing and require different skills, capabilities and intensity of focus.
Analysis FT’s new owners Nikkei are cut from the same template
‘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,’ says Nikkei chief executive
“Pearson has been a proud proprietor of the FT for nearly 60 years. But we’ve reached an inflection point in media, driven by the explosive growth of mobile and social. In this new environment, the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company.”
Little known in the UK, Nikkei – founded in 1876 – is one of the largest media companies in Japan, spanning newspapers, broadcasting, magazines and digital media. The group includes a flagship newspaper of the same name, which has 3 million subscribers, TV Tokyo and finance and a business news channel, Nikkei CNBC.
The sale does not include Pearson’s frequently coveted 50% share in the Economist group or the FT’s headquarters building by the Thames in London. Under the terms of the deal Nikkei, which is the largest independent business media group in Asia, will pay a commercial rent for the FT’s building once the takeover is finalised at the end of the year.
Nikkei’s surprise acquisition of the “Pink ’Un” was confirmed after hours of intense speculation that began after Pearson had first told the stock exchange that it was in “advanced discussions” over a sale of the newspaper yesterday morning. Initially, the German media group Axel Springer, the owner of the Bild tabloid, had been seen as the most likely acquirer.
Fallon hinted that there had been a bidding battle for a newspaper often described as a trophy asset and thought most likely to end up in the ownership of a US media mogul. “I am confident that we have achieved a fair value … and coupled that with finding a very good home for the FT,” the chief executive said.
Asked what guarantees there were that the new owners would not interfere with the title’s traditional editorial independence, Fallon cited Nikkei’s “strong track record in terms of fairness and accuracy as well as the integrity and independence of its journalism”. But the Japanese group had not been asked to create an independent editorial board for the FT or make specific guarantees. Fallon said that the company’s “actions speak louder than words” in this respect.
Long-serving editor Lionel Barber is expected to stay on. “In all the conversations I’ve had with Nikkei one of the things [they cited] again and again was the -quality of the leadership both editorial and commercial,” said Fallon.
The FT sale price dwarfs the $250m that Jeff Bezos paid for the Washington Post in 2013. Rupert Murdoch paid $5bn for the group that owns the Wall Street Journal and the Dow Jones wire service in 2007.
Tsuneo Kita, chairman and Group chief executive of Nikkei, said: “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.”
Fears over editorial interference are understood to have scuppered the chances of other potential buyers. John Ridding, chief executive of FT Group, the Pearson subsidiary that owned the newspaper, said: “The issue of editorial independence was a central consideration and condition of this whole project. It’s obviously something we take very seriously.”
The National Union of Journalists said it would be seeking guarantees from the new owners about working conditions and editorial independence, and expressed “concern at the speed at which the deal seems to have been made”.
NUJ national organiser Laura Davison said: “A normal day at work … turned into chaos and confusion. NUJ members will need rapid assurance and guarantees. If Nikkei wants to maintain the newspaper’s international reputation, it must invest in the journalism and the staff.”
Sir Howard Stringer, the Welshman who ran Japanese giant Sony for 15 years and is now on the BBC’s executive board, said his experience of Nikkei and Japanese companies generally was that the deal could be a good one for the FT and its journalists. “It’s not a bad thing when a Japanese company buys another. They tend not to be heavy-handed but more thoughtful and careful than most corporations when they go charging in.”
In recent years, Pearson has been thought to be considering a sale of the title, following the departure of the company’s previous chief executive Dame Marjorie Scardino two years ago. She once said the paper would be sold “over my dead body”. But when Fallon succeeded her two years ago he refused to reaffirm this position.
Pearson is now expected to negotiate a separate sale of Pearson’s 50% stake in the Economist Group, the highly -profitable publisher that owns the Economist magazine and the Economist Intelligence Unit. One rival media executive called it “the real prize”.