What fortune could the Japanese bring to the FT?
The Pink ’un is set to have a Far Eastern flavour, as publisher Pearson sold the Financial Times to Japanese media group Nihon Keizai Shimbun (Nikkei) for £844m
Nikkei’s cash buyout includes the purchase of the trademark financial and political newspaper and its stable of other business publications, including The Banker, Investors Chronicle, MandateWire, Money-Media and Medley Global Advisors.
However, the sale does not include Pearson's 50% stake in The Economist or the FT's London office at One Southwark Bridge.
Having been part of Pearson’s portfolio for almost 60 years, the FT Group will now hook up with the Nikkei – the largest independent media firm in Asia, joining a host of other books, magazines and websites, as well as the company’s flagship self-titled newspaper.
Known for its conservative approach to financial news, the Far Eastern firm has recently delved into foreign policy issues, such as the relationship between Japan and South Korea, and experts suggest the company is likely to bring a greater global focus to the FT.
Despite the tumultuous nature of the newspaper business nowadays, the FT is in relatively good shape, and Pearson – who have been previously rumoured to be eyeing a sale – may have felt this was the perfect time to cash-in.
Launched in 1888, the Financial Times has been one of the leading proponents of the digital subscription-based service, with 70% of its 737,000 readership generated through its website.
However, with recent studies showing that 41% of readers aged between 16 and 34 consume their news through the apps and the internet, with tablets and mobile devices growing as the main vehicle of digital traffic, the FT will have to continue investing this area.
And while Pearson focuses its efforts on traditional publishing platforms, Christian Stadler, Professor of strategic management at Warwick Business School, says Nikkei can provide the expertise and investment to develop the Financial Times into a more mobile-focused and social entity.
“Pearson is much more of a publishing company with a particular focus on education. The FT was no longer part of the core business. If, however, you are not part of the core this also translates into less resources and attention to this part of the business. To deal with the challenges in social and mobile you need the full attention of the top management.”
However, Stadler warns that Nikkei will need to fully understand the Financial Times culture before making any changes.
“Similar to my previous point I would suggest not to make substantial changes straight away. It is important to have a period of ‘getting to know and understand’ each other,” he told Insights. “You also need to bear in mind that one or two changes at the top don’t change a company. We tend to overestimate the power of the top managers. Sure, they are important, but they operate within an ecosystem that determines what can and cannot be done.”