The Financial Times newspaper has been bought by Japanese media behemoth Nikkei for a sum of $1.7 billion (844 million pounds).
Japan’s dominating publisher, Nikkei, has been in discussion with senior executives at the Financial Times and its parent company, Pearson, for the sale of the internationally respected salmon-colored newspaper. Bloomberg and Reuters were hot favorites to buy the Financial Times, and so was German media company Axel Springer. However, Nikkei surprised everyone with a more than adequate offer of $1.7 billion, reported MSN .
The 127-year-old newspaper can be easily considered as an institution in itself for accurate and reliable economic journalism, and a global brand. What makes the deal important is that the Financial Times selling price is far higher than the two recent sales of similar publications. The Boston Globe, and its affiliated New England media assets, sold for $70 million, while the Washington Post changed ownership for just $250 million.
Incidentally, the sale doesn’t allow Nikkei ownership of Pearson’s 50 percent stake in the Economist Group and the Financial Times’ central London building. Nikkei will have to rent the premises from Pearson. Speaking about the transaction, Pearson’s chief executive, John Fallon, said as follows.
“The price represents a very good return for Pearson shareholders.”
Despite the euphoria, Pearson’s shares rose by just about 1 percent for the day. However, the price is certainly unheard of, and it clearly indicates the desperate need for globalization of media.
Explaining the phenomenon, Fallon said the media has reached an inflection point as global audiences crave more information on their cellphones and via social media, reported the New York Times . As for the decision to sell Financial Times , Fallon explained that Pearson describes itself as the world’s largest education company,
“What The F.T. really needed was to be a part of an organization that in everything it does is completely and absolutely focused on journalism.”
The educational publishing business is one Pearson’s most lucrative cash cows. As it has generated about three-fourths of Pearson’s profit last year, it is quite understandable why the company gave up the Financial Times , albeit for a handsome fee. On the other hand, Nikkei has been strongly expanding overseas. In 2013, the publisher had set up Nikkei Asian Review , an English-language magazine and website of the same name.
Japan has interestingly stuck to traditional print media and hence, Nikkei’s vast circulation has surprisingly supported it against the rising tide of the internet-based news distribution that is way faster and easier for consumption. With the Financial Times in its bouquet, Nikkei can now be considered a definitive platform to dole out financial news to the world.
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