Yesterday the Financial Times announced that Nikkei, Japan’s largest media company, will buy FT Group, for £844M. The FT Group, which includes the Financial Times, FT.com and other titles, is being sold by Pearson, a UK-based company that has owned the FT group for 58 years. Axel Springer was also considering the purchase, but it announced yesterday that it was not going to buy the newspaper group.
The deal, which is expected to close by the fourth quarter of this year, does not include the FT Group’s headquarters in London or Pearson’s 50% stake in the Economist Group. Pearson plans to focus on its larger education unit which sells textbooks and online learning tools, says the USA Today.In April, circulation for both print and digital reached 722,000, and FT.com subscriptions have increased 20% year over year. Digital circulation now represents 70% of total circulation.Pearson’s chief executive John Fallon explains the reason for the sale: “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.”Tsuneo Kita, chairman and group chief executive of Nikkei, said he is proud to be teaming up with the Financial Times, a well-respected global news organization whose philosophies mirror its own.”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,” Kita said.This sale is not the first for Pearson this year. It is a continuation of the company’s realignment to be a more focused company, according to USA Today. The following statement comes from the company’s annual report, released in March.”We have already sold a number of businesses where either we lacked scale or we saw limited scope for us to have a more direct impact on learning outcomes…This work will continue, as we focus our resources and energy on the biggest education challenges we see around the world.”This news comes just days after FT.com tweeted that it was relaxing its hard paywall to allow website visitors to view one article per day when visiting from Twitter. We wonder if the impetus for this change was to further boost FT’s website traffic.
Insider Take:As media companies struggle to find their footing in a rapidly-changing marketplace, we expect more deals like this to occur where economies of scale and reinvention are necessary for survival. In this case, FT Group wasn’t a failing organization; with a redesign, new apps and subscriber packages, it was an attractive buy. Pearson had several buyers to choose from, and it selected one whose journalistic integrity and values were in line with its own.Because the deal won’t close for several more months, and because FT has recently been revamped, we don’t anticipate a lot of major changes this year. Next year will be interesting though as FT and its new owner evaluate the numbers and determine how they can leverage each other’s strengths.
