Write Comment July 30th, 2015 journalism · News Response · Writing
News of the Japanese powerhouse Nikkei Inc. acquiring the Financial Times of London for $1.3 billion rocked the media landscape on July 23.
Pearson PLC, the parent company of the FT Group that controls the Financial Times, will sell the venerable newspaper to Nikkei, Japan’s largest financial news group. In addition to publishing Nihon Keizai Shimbun, the world’s top business daily with 3 million subscribers, the company also controls dozens of affiliated businesses that span broadcast outlets, database services, events, and the Nikkei stock market index.
Industry observers have characterized the FT deal as yet another example of rapid consolidation as traditional media properties struggle to overcome plummeting ad revenues. Some critics have raised concerns about the FT – Europe’s leading broadsheet for financial markets – for being sold to a non-Western entity. Others have compared this transaction to the $5.16 billion purchase of Dow Jones and the Wall Street Journal by Rupert Murdoch’s News Corp. in 2007; or when Amazon CEO Jeff Bezos bought the Washington Post from the Graham family for $250 million in 2013.
By now it’s clear that big media companies will continue to swallow smaller ones in an effort to bulk up against the juggernauts of Internet advertising, Google and Facebook. In this context, the East-West pairing of Nikkei and the FT makes strategic sense for both parties.
Nikkei will get a significant foothold in European financial markets, which should broaden its reach and complement its existing business with the prestigious FT brand. For Pearson, selling the FT will allow the company to focus on its core education unit that publishes textbooks, online learning games, reference materials and standardized tests. Pearson also announced plans to sell its 50% stake in the Economist Group, publisher of The Economist magazine, although that transaction has not yet been approved.
The Financial Times was established in 1888 as a four-page newspaper. Last year, it reported an adjusted operating profit of $37 million. Nikkei was founded in 1876, and last year it reported earnings of $82 million.
Those of us in the PR field have to wonder if this deal signals a gradual shift of the media fulcrum toward Asia, and if so, how that shift might impact the media ecosystems based in New York and London. Only time will tell if this marriage of the FT and Nikkei is a global match made in heaven, or a desperate attempt by two aging media brands to stay relevant in the 21st century.