It makes sense: the two titans of business information, Thomson Reuters and Bloomberg, competing for a great news brand
Let me follow a rumor in real time …
My lunch companion, a senior executive at Thomson Reuters – where, it seems, just about every journalist of a certain age and experience is going to work, or wants to go to work – drops a passing remark about how, at Thomson Reuters, they might use the Financial Times. Then, this is contrasted with how the FT might be used at Bloomberg, Thomson Reuters' great rival, and the other place where all out-of-work, or worried-that-they-soon-will-be-out-of-work, journalists want to be.
Then, it trips out, according to my friend – said quite unselfconsciously, rather as though it should be obvious to all; for a moment, I actually think I've somehow missed the story – that the FT, having flirted with and then turned down an acquisition offer from Bloomberg, is now talking to Thomson Reuters.
I should qualify my source: he or she is not from the deal-making side (where they keep their mouths shut or, at least, more carefully confide), but someone likely to be consulted by the deal-making side. My source, by the way, has been usefully loose-lipped before, when in the woe-is-me-what's-going-to-happen-to-us mood of so many media people.
Thomson Reuters and Bloomberg, at least on their media sides, generate, in my experience, a disproportionate amount of woe-is-me-talk. This is because they are among the last places where people of a certain generation can still find adult offices and reliable pay checks, creating an island or survivor mentality. There is a sense, too, of small-timeness, of everybody understanding the random luck of being hired by a rich man. (David Thomson and Michael Bloomberg, both worth about $20bn, regularly vie with each other in the net worth sweepstakes.) For many, this is what it seems to have come to: the uncertain ambitions of Thomson Reuters and Bloomberg are perhaps the only hope for traditional journalism.
For good measure, my lunch companion also says that at Thomson Reuters, they believe that the Wall Street Journal's parent, News Corporation, will sell the Journal in two years, give or take – an actuarial (New Corp Chairman Rupert Murdoch, who protects the money-losing WSJ, will shortly be 81), as much as a business analysis.
True, my companion clearly wishes for an FT or WSJ acquisition by Thomson Reuters to be true; so wishfulness may be coloring his sense of corporate ambition and the likelihood of a transaction. After all, the Thomson company, which owned papers in Canada in London, is one of the few newspaper companies – perhaps, the only one – to have mostly exited the business, reinventing itself, at great profit, as a modern, specialized, high-value, information company.
Even when Thomson bought Reuters in 2007, it bought it not for its legacy news operation, but for its much greater business information assets. Bloomberg, for its part, generates the overwhelming share of its revenues from its terminals and financial data products. Journalists work for Thomson Reuters and Bloomberg only at some sufferance – they aren't really needed.
And yet both companies seem to have dreams of boosted brand greatness. Both have invested heavily in their news operations – even to uncertain, or dubious effect (there have been recent reports that Bloomberg is unhappy with the lackluster results of its television expansion and may shrink the business).
At Bloomberg, its founder and controlling shareholder, the mayor of New York, is coming to the end of his political career and, by all reports, looking for new worlds to conquer. Several years ago, when the New York Times was at its financial nadir, he was urged by many to grab it – and seemed tempted. And if not the Times, the mayor himself is said to have asked, what about the FT – the favorite paper of globe trotting businessmen? (Rupert Murdoch openly speculated to the people around him, including me, about whether it would be more worrisome for him and the Wall Street Journal if Bloomberg did own the Times or the FT; better, he concluded, for Bloomberg to own the Times.)
At Thomson Reuters, there are, evidently, grander impulses, too. The Thomson family, which sold the Times of London and the Sunday Times to Rupert Murdoch in 1981, has let it be known that it might consider buying them back if News Corp is compelled by the British phone-hacking scandal to sell them. (Murdoch recently tweeted: "Ignore Thomson Reuters. Thomsons chickened out of GB decades ago, except for oil money. Now control Reuters and no idea what bias they push.")
Of course, there is the FT to consider – and the hopes and ambitions of its parent, Pearson. The best source I know with a view into the high corporate levels of Pearson, whom I call immediately after lunch, demurs: "The FT will be sold. But she won't sell it." She being Marjorie Scardino, the present, seemingly-always-embattled CEO, and former newspaper editor, who has repeatedly defended ownership of the FT, even as Pearson has turned ever more into an education company.
Back to my original source, now settled in at the office: "How solid is this?" After the sinking sensation of realizing that foot may have been put in mouth, the source shuts the office door and says: "Solid. Solid. Really. Still at an informal level of conversation …" – a slight retreat – "but in clear discussions." In other words, even if true, it could be a business lifetime until an agreement. Still. The logic of a deal can almost be as good as a deal.
There are four companies that dominate the brand name financial information business: Pearson with the FT, News Corp with the WSJ, and Bloomberg and Thomson Reuters with their myriad assets. The latter two make their money and vast margins in this business. The former make their money in other businesses and maintain a foothold in financial information and news for mostly extra-business reasons. It is certainly true that neither Bloomberg nor Thomson Reuters need a newspaper – and yet it is true, too, that it could change the game were one of them to get a major financial news organ (so much so that each would probably do what is necessary to try to prevent the other from getting one – vastly enhancing the value of both the FT and WSJ). Indeed, while neither Pearson nor News Corp are ever going to turn the FT or WSJ into significant earners, Bloomberg and Thomson Reuters, with their back-end financial information resources, might be able to build a powerful and profitable financial news front end.
What's more, even before the recession, the terminal business was slowing for Bloomberg. So there may even be logic in seeing the media business, at least for last-man-standing players, as a growth business. If there is not a deal here, surely there is a dance.
And there is, too, a pleasing and – especially for rich men – perhaps irresistible counter-version of events. The news business, historically the province of organizations with big brands and big reach and big budgets, has been bitch-slapped by the digital upstarts. But here are two players distinguished by their establishment credentials, sound business footing, and vast resources – which, if they choose to act, could change things up, and, as well, allow many news journalists of my generation to breathe again.
I believe it: the game's afoot. Of course, never underestimate the glacial pace of the inevitable.
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