The Surprise Buyout of the Financial Times
日経のFT買収の衝撃から見えたもの
Nikkei Inc.’s buyout of the Financial Times Group from its parent company Pearson PLC surprised many in the news media when the report ran in late July that the Japanese business media group agreed to pay a whopping $1.3 billion, or around 160 billion, to purchase the British establishment. The price is said to be 35 times that of the operating profit of the FT and far exceeds the $250 million paid in 2013 by Amazon Inc. founder Jeff Bezos to purchase the Washington Post. And it is definitely one of the largest acquisitions by a Japanese media company. By acquiring the FT Group, known best for its salmon-colored prestigious international broadsheet, Nikkei said it wants to advance its global and digital growth strategy.
Indeed, the FT is regarded among journalism circles as the quality paper that was one of the first to successfully monetize its digital content by launching the pay-wall, setting a model for other media outlets. Currently, digital subscribers of the FT exceed 500,000, or around 70 percent of the total paying audience of the 730,000 readership of both print and digital combined. Nikkei was also among the first in Japan to start the pay-wall system and has 430,000 digital subscribers, in addition to around 3 million broadsheet readers. At a time when the number of newspaper subscribers are declining while news content is increasingly consumed via online devices, Nikkei’s vision to strengthen its global presence and enhance its digital strategy are keys for any news organization to survive in the changing environment. Nikkei hasn’t outlined any details yet, but it will be interesting to see how this buyout will develop and impact the industry.
Observing how the Japanese and British press carried this news, there were clear differences in the tone of the stories. Reports by the Japanese media, including Nikkei’s own daily Nihon Keizai Shimbun, were generally straightforward about the major buyout. The fact that the FT was on sale was hardly known in Japan in the first place, so people were honestly surprised to learn that Nikkei was involved in the bid and had the astonishing financial capability. Meanwhile, the British media’s reports were much more detailed and dramatic. As the FT said so itself, the buyout was “a matter of public interest in the UK.” Until the very last minute, it was believed that the German media group Alex Springer would be the most likely new owner of the FT and no one expected an unfamiliar Japanese media group to win over the bid. In addition to reporting what happened behind the scenes, several papers raised concerns on what would become of the editorial independence of the 127-year-old British liberal establishment, pointing out the difference of journalistic culture between Nikkei and the FT. While depicting the Nikkei newspaper as a respected daily among the Japanese business circle, the British media criticized that even though Nikkei may carry scoops, the paper isn’t aggressive about chasing corporate scandals.
A prominent example cited was the fact that the FT was the first newspaper to break the news on the 2011 Olympus Corp. cover-up scandal, but the Nikkei only ran the story when the news became too big to ignore. Michael Woodford, former Olympus CEO who was the whistleblower, wrote to the FT to raise his concerns, noting that Nikkei’s reports on the case was “belated and inadequate” and it “acted like the public relations office of Olympus.” The Guardian, in its editorial, wrote: “Mainstream Japanese journalism is not corrupt, but it is respectful, like the culture around it. Anglo-Saxon journalistic traditions are not, at their best, respectful of anything.” Snobbish as it may sound, the British media is making a valid point. I wonder what Nikkei reporters thought of such criticism.
Nikkei chairman and group CEO Tsuneo Kita said that the independence of editorial policies will be maintained and that they have no intention of changing the FT’s reporting approach. FT executives have also said that the issue of editorial independence was a central consideration of the acquisition. Hopefully, Nikkei will keep its word, and I actually look forward to them becoming more vigorous in chasing after businesses if they are serious about catering to the global audience.
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*This issue should have been appeared in the 4th issue, but was appeared in the 5th issue because of an editing error. We sincerely apologize for this oversight.
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