Sunday, July 26, 2015

Pearson exits Financial Times

In a surprising development, the Nikkei group of Japan has bought the Financial Times (FT) from the Pearson group. FT has a well-known reputation as a purveyor of business and financial news. Nikkei is already in financial services industry and therefore it makes sense, at least superficially, for it to diversify into a foreign newspaper with established credentials.

The Japanese press has a subservient relationship with the Japanese business. When a huge financial scandal occurred in Olympus, a Japanese company, in the early part of this decade, the news broke through FT and not through any Japanese medium. Of course, no one credits FT with robust editorial independence. Recently, some former FT editors have called for a more formal separation of editorial and commercial interests at FT. It is however moot whether Nikkei will maintain even the existing editorial freedom in the newspaper. It will be a pity if it doesn't.

The Pearson group is now in education and financial information services. It has ownership stakes in The Economist newsmagazine and also in the Penguin Random House publishers. It has already sought to exit from The Economist. At present, The Economist is owned by Pearson, the Schroders, the Cadburys and the Rothschilds. This newsmagazine has an enviable independent culture in its editorial space. For this very reason, it may be difficult to find a buyer for Pearson's stake. One hopes that editors at The Economist will not succumb to business pressure anytime soon.

Absence of Chinese interest in either FT or The Economist is noteworthy though not surprising. The Chinese with their financial muscle can easily 'lenovo' them . Despite their Confucian legacy, the Chinese continue to be more interested in things tangible and physical and less so in matters soft and light. These hard-nosed business strategists would have realised that any less than accommodative media are not their cup of tea.

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