After Reuters broke the news, UK publishing giant Pearson on Thursday confirmed it has sold its iconic salmon-hued Financial Times newspaper and other FT Group assets to Japan’s Nikkei for $1.32 billion in cash.
By shedding one of the world’s premier business media brands, Pearson will now focus on its more profitable education publishing business in North America—where its teaching materials are popular for common core test prep and higher level instructional uses—and beyond, with emerging economies a growing emphasis.
— Financial Times (@FT) July 23, 2015
As the FT’s own coverage noted, the bid from Japan’s biggest media company trumped interest from Germany’s Axel Springer, which couldn’t match the commitment of Nikkei. Reuters commented that the deal “marks the biggest acquisition by a Japanese media organization and is a coup for the employee-owned (Nikkei) firm which lends its name to the main Japanese stock market index.”
“Pearson has been a proud proprietor of the FT for nearly 60 years,” stated Pearson CEO John Fallon, who also spoke to the FT’s John Gapper about the sale. “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.”
“Pearson will now be 100 percent focused on our global education strategy,” Fallon added. “The world of education is changing profoundly and we see huge opportunity to grow our business through increasing access to high quality education globally.”
A New Brand Steward in Nikkei
As for the FT’s new owner, Fallon commented that “Nikkei has a long and distinguished track record of quality, impartiality and reliability in its journalism and global viewpoint. The Board and I are confident that the FT will continue to flourish under Nikkei’s ownership.”
“I am extremely proud of teaming up with the Financial Times, one of the most prestigious news organizations in the world,” added Tsuneo Kita, Chairman and Group CEO of Nikkei. “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 Group Regroups
As noted in Pearson’s press release, the FT brand’s assets are a formidable collection of media properties:
“Financial Times is one of the world’s leading news organisations, recognised for its authority, integrity and accuracy. It includes the FT newspaper, FT.com, How to Spend It, FT Labs, FTChinese, the Confidentials and Financial Publishing (including The Banker, Investors Chronicle, MandateWire, Money-Media, Medley Global Advisors and more). At the FT, total circulation across print and digital rose more than 30% over the last five years to 737,000, with digital circulation growing to represent 70% of the total, from 24%, and mobile driving almost half of all traffic. Content and services now account for the majority of revenues.”
Fallon said of the iconic FT in a blog post: “For fifty-eight years, Pearson has been the proud owner of the Financial Times. We’ve invested in its global expansion and digital transformation, through good times and bad; and all the time, protecting its editorial independence and championing the quality and breadth of its journalism. Both Pearson and the FT have benefited greatly from the relationship. The FT is recognised across the globe as an intelligent and authoritative commentator on world events, finance, commerce and economics.”
Sole Focus on Education
Changing times have brought things into focus, he added: “In recent years, we’ve developed an increasing focus on our biggest, most exciting opportunity – to help people make progress in their lives through learning. As that opportunity has crystallised, it’s become clear to me and the Pearson board that the scale of the challenge requires our undivided attention.”
The changing media landscape has also made Pearson realize it doesn’t want to invest in what’s needed to make the FT brand more competitive in a world where paywalls aren’t enough to create sustainable growth.
“The pace of disruptive change in new technology – in particular, the explosive growth of mobile and social media – poses a direct challenge to how the FT produces and sells its journalism,” Fallon commented. “It presents the FT with a great opportunity too – to reach more readers than ever before, in new and exciting ways. Nikkei has a long and distinguished track record of quality, impartiality and reliability in its journalism and global viewpoint. The Board and I are confident that the FT will continue to flourish under Nikkei’s ownership.”
“I’ve every confidence in the FT’s ability to seize the moment, as it has done ably so far, in its digital transformation. The readership is at an all-time high, with readers willing to pay more than ever for its journalism,” he added. “But, after much reflection and detailed analysis of both the opportunities and challenges that lie ahead, we have concluded that the best way to ensure the FT’s continuing journalistic and commercial success is for it to be part of a global, digital news organisation that is 100% focused on these same issues.”
The FT will remain part of Pearson until the transaction closes, pending regulatory approval, around the end of this year. Pearson and the FT will continue to work together in areas like business education and teaching English to professionals in countries such as China, as Fallon noted. The agreement does not include FT Group’s London property at One Southwark Bridge or Pearson’s 50 percent stake in The Economist Group.
As for how Pearson plans to spend the proceeds of the sale? “We plan to reinvest the proceeds from today’s sale to accelerate our push into digital learning, educational services and emerging markets,” Fallon stated. “We will focus our investment on products and businesses with a bigger, bolder impact on learning outcomes, underpinned by a stronger brand and high-performing culture.”
“This will help us progress toward a future where learning is more effective, affordable, personal and accessible for people who need it most. By doing so, we can help more people discover a love of learning and make progress in their lives. This is the promise of learning– and the future of Pearson.”