Too many years ago, this young reporter was about to move from one of Britain’s biggest newspaper groups to a paper with a daily sale of fewer than 200,000 copies. A hard-bitten veteran, who had spent years reporting for the Daily Mail and the Daily Telegraph pleaded with me over farewell drinks not to go to the Financial Times.
“Don’t commit journalistic suicide,” he said. “This is your wake before you are dead. This is your funeral as a journalist. The Financial Times is not a newspaper: It is a trade magazine for the City.”
How wrong he was. The Financial Times today is one of the top five daily newspapers in the world, the very best in my view. It offers an unparalleled combination of superb business coverage, the world’s best international news, a gaggle of gaggling columnists from the profound to the quirky, including an agony aunt and an agony uncle, inspired writing on the arts, culture and literature, and a reasonable smattering of the most important sporting news.
Its reputation can open doors that are closed and bolted to other journalists. Presidents and prime ministers are happy to be interviewed knowing the paper’s reputation for integrity and influence.
Last month the paper set a new precedent when Pope Benedict XVI wrote an opinion column for the FT.
Yet, is the FT is so good that it may face its funeral as an independent newspaper? Financial circles of the City of London and Wall Street are asking: Who will make a bid for the FT, when will they do so, and how much will they be prepared to pay?
It will be a sad day for the FT and for quality international journalism if the paper is sold; it will be a victory for the financiers who are quick to put a price on everything but who know the value of nothing.
The price will be high, ranging between $1.2 billion and $1.8 billion. According to Jeffrey Goldfarb of Reuters Breakingviews, if estimates are based on those for the parent companies of the New York Times and Washington Post — valued at 60 percent of last year’s sales plus a 30 percent takeover premium — the FT would be worth only ￡350 million ($660 million). But he speculated that the paper would have “trophy value” similar to a successful sports club, like Manchester United, which is typically valued at four times its revenues; on that basis, the FT could be worth ￡1.7 billion ($2.75 billion).
Speculation about either an impending or imminent sale also includes names of potential buyers. Thomson Reuters, whose history through Julius Reuter goes back longer than the FT to the days of the pigeon post, is normally cited in the same sentence as the brash newcomer Bloomberg as the leading candidates to buy the FT.
Bloomberg, with revenues of $7.6 billion, and Reuters, with $13.8 billion, could afford the FT unless there was a crazy bidding war, in which case an entrepreneur with an outsized ego might fancy the FT.
New York Mayor Michael Bloomberg was asked by one of the FT staff when he visited the paper’s riverside London headquarters whether he was considering buying the paper. He quipped: “I buy it every day.”
Would Rupert Murdoch be tempted in spite of having gotten burned by paying over the odds for the Wall Street Journal?
Goldfarb also throws the names of movie mogul David Geffen, Russian oligarch Alexander Lebedev, who already owns The Independent and the Evening Standard in the United Kingdom, and Mexican telecom billionaire Carlos Slim as interested in newspapers.
A Hong Kong newspaper claimed that advisers for the FT’s parent had gone to China to look for a buyer — which, if true, shows the greedy idiocy of financial advisers. Could Beijing — where journalists are instructed to be the mouthpieces of the Communist Party and state — promise to maintain the FT’s independence? Would any FT journalist believe them?
The reason for the feverish speculation about the future of the FT comes because Majorie Scardino has just stepped down as chief executive of Pearson, which has owned the FT along with a 50 percent stake in The Economist since 1957. Rona Fairhead, the CEO of the FT, will also leave at the end of April.
Scardino famously said that Pearson would sell the FT “over my dead body.” But her successor, John Fallon, rose to the top through the education side of the Pearson business and appears not to have the same affection for newspapers. When asked about the paper’s future, he replied that it was a “valued and valuable” asset that fitted well with Pearson. But he added that “the portfolio of Pearson [is] constantly changing and evolving … we never rule out anything.”
Fallon and Pearson will want to concentrate on the group’s educational and publishing businesses, in both of which it is the biggest in the world, especially after Pearson’s merger of its Penguin books business with Random House.
The FT now accounts for a mere 6 percent of Pearson’s operating profit, and everybody, except diehard ink-stained journalists and entrepreneurs with egos, knows that newspapers are a dying breed.
So, is now the time for Pearson to turn a distraction into a good profit by selling the paper? The FT’s denials that any deal is on the table or impending have merely added to the speculation of its imminence. They would deny it, wouldn’t they?
Yet, as a modest pensioner of the FT, I hope that the inevitable does not happen. The paper and its journalism have flourished by being independent. Even though Pearson is a big multinational conglomerate, the FT was treated as a special protected species separate from the rest of the group, latterly thanks to Scardino. Surely, it also adds distinction and quality to the Pearson name.
The paper’s emergence from City tipsheet to heavyweight international newspaper was because of the genius of Gordon Newton, editor from 1950 to 1972, ably assisted by his inspired choice of young graduate reporters fresh from Oxford and Cambridge. Newton, himself a Cambridge graduate, was not stupid but he was inarticulate. When he gave me my job interview, it lasted all of two minutes before he pressed his intercom button in my presence to tell the managing editor, “I have no objection.”
He would accept or reject an article without giving any reasons, and would stand over a writer’s shoulder sucking his teeth. But Newton had a great sense of curiosity and was willing to admit his own ignorance, which he encouraged his reporters to remedy.
One morning after listening to BBC news about the record transfer sum paid for a footballer, he came into the office, grabbed the nearest reporter and said, “Write me the definitive article about how the football market can afford such sums.” Thus the FT began to show the world that economics and business was the very stuff of life.
Newton’s main lieutenant for developing international news was JDF Jones, whom he appointed foreign editor at the age of 28. Jones was an Oxford graduate, but he had cut his journalistic teeth in southern Africa, and later covered the 1965 Indo-Pakistan war for the FT.
Jones cared little about economics or Europe, which caused clashes with Newton’s successors. But he was a brilliant reporter, and he had the prize skills of being able to distill complicated subjects into crystal-clear writing, and he understood quickly any subject he put his mind to.
Jones also was a sweet-talking Welsh wizard at massaging and managing the talented egos of the young foreign staff he gathered under him. Jones and his team broadened the horizons of the FT. I, for example, did a series of reports from an ordinary Indian village that had been bypassed by electricity or water pipes, let alone prosperity. We filled in the international map with honest, penetrating reports from countries other newspapers were not aware existed.
Newton and Jones insisted on the highest standards. When he appointed me to take charge of the paper’s Asian coverage at age 28, Jones said he expected that I should know and understand every country I was responsible for at least better than the British ambassador stationed there.
Only the language specialists at the BBC World Service rivaled us in their understanding of countries, but the BBC was — and is still — weak in business and economics, especially when it strays outside the United States and Europe.
After becoming managing editor and then going to South Africa as new bureau chief, Jones returned to London and started the FTWeekend coverage, a brilliant addition to the FT’s success.
Gradually, the newspaper followed its pioneering reporting, and the FT started printing abroad, initially in Frankfurt in 1979, and now in 22 locations round the world offering five separate editions, so that readers in leading business get the FT delivered in time for their breakfast. (An exception is Osaka, where the Japanese distribution system ensures that the paper printed and available in Tokyo at 7 a.m. each day only arrives in time for afternoon tea when the markets have shut.)
Not everything about the FT is perfect. Its investigative reporting is weak, and some of its reporters, and editors in their choice of the stories they highlight, show a naivete that my generation did not.
The paper is mainstream and should be open to more radical opinions. The choice of long articles to which a full page is devoted is sometimes quirky.
In my day, I recoiled in horror when the “How to spend it” column boasted of a new product, gold toe-nail covers. Now, to my increasing horror, “How to spend it” has migrated into a glossy magazine published with the paper 30 times a year and crammed with advertisements for luxury products and articles extolling goodies that surely appeal only to the 1 percent of the paper’s filthy rich readers. The latest issue highlights a folding table for taking on your travels at a cool cost of ¥3 million.
Any sale would be bad and unsettling. Being enfolded into a big group would have the editor constantly looking over his shoulder to head office when not searching to realize the synergies of being part of a big group. However much proprietors promise continuing editorial integrity and independence of the new acquisition, the money they paid tells the lie.
Even Michael Bloomberg, whose eponymous news agency boasts of its independence and which employs committed news executives, great reporters and gifted columnists, is reported to have sniffed at the deal under which the FT keeps its hands off The Economist’s coverage in spite of the 50 percent stake. “You don’t have control. Why would you want that?” Bloomberg asked.
Selling the FT would be a victory for the financial engineers and M&A specialists who believe that big is beautiful — especially their fees — before they recommend, a few years later, the unbundling of complicated conglomerates to realize the full value of individual assets, as well as more fees for them.
Kevin Rafferty was in charge of the FT’s Asia coverage and later opened the paper’s first office in Hong Kong.