Rumours swirled across the international media this week that Rupert Murdoch, in partnership with the state media of Abu Dhabi, was plotting to buy the Financial Times.
The story was ardently denied; Pearson, the current owner of those venerable salmon-pink pages, said the FT was “not for sale” and that it was an “important part of Pearson’s strategy”.
Nor is it the first time such rumours has done the rounds. Michael Wolff listed Murdoch as a potential buyer back in October 2012 after veteran Pearson chief Marjorie Scardino stepped down from her post.
But it is a worrying rumour. In light of the current debate on media ownership who wants to see the man who tried to buy his own presidential candidate take over a paper whose audience was described by its own editor as “an elite category…the decision-makers”?
It also has the ring of plausibility. While Rupert cultivates around himself the aura of a hard-nosed businessman, it’s clear that he is willing to lose money on projects which bring him power or prestige (see David McKnight’s recent book Murdoch’s Politics). Influence, not pure profit, drives the ageing media don, and they don’t come much more influential than the Financial Times.
Then there is the spectacular saga of Rupert Murdoch and the Wall Street Journal. Murdoch’s News Corporation bought the WSJ from the Bancroft family in summer 2007, adding the swank bankers’ daily to its American portfolio beside more downmarket groups like Fox News and the New York Post.
We call it ‘spectacular’ because the $5bn offer Murdoch made for the paper was way above its value at the time, and because the WSJ’s own journalists lobbied fiercely against his bid. Rival papers carried leaders begging the Bancrofts not to sell, Bancroft members tried to stand their ground, and the WSJ’s union sought alternate buyers in a policy described as ‘Anyone But Rupert’. Sarah Ellison’s book War At the Wall Street Journal catalogues these events and more.
Finally, it fits because the phone hacking scandal has clearly not dulled Murdoch’s ambitions. Last month News Corporation announced plans to split its newspaper assets off from its television and media arm, opening the way for a renewed bid for BskyB. It remains to be seen what influence the famously domineering leader will be able to exert over that deal – it may leave him formally cut off but informally calling the shots.
But even if we don’t take Pearson’s denial at face value, there is one big factor which argues against such a deal. Media pundits often mock the Guardian for its risky strategy of giving everything out for free; nobody knows when and if the paper will stop losing money. Meanwhile, the jury is out on the utility of Murdoch’s Times paywall because people won’t always pay for what they can get elsewhere for free. But the FT is forging ahead with an online-first strategy precisely because its principle audience – the business and political elites of the rich world – will always pay for what they’ve got.
That is to say that even if the news market for ordinary consumers were to shut down entirely, big businesses will always need to know what’s going on. Short of total societal collapse, they, at least, will always be willing to pay subscription fees for crucial business intelligence and market analysis by specialists in finding things out.
So even as the FT’s paper circulation figures fluctuate mildly upward and downward, its subscriber base grows to encompass a bigger audience than it’s ever had before. In 2009 it launched China Confidential, a specialised business intelligence service for the eastern market; in 2011, Brazil Confidential joined its long list of spin-off specialist services. Its future is a sci-fi vision of news as a premium service: expensive, exclusive products beamed through aeroplane wifi to mobiles and tablets or piped in bulk to corporate offices. Its model is sound.
Indeed, Pearson’s denial said as much:
“As Pearson chief executive John Fallon told analysts at our recent results presentation, the Financial Times is an important part of Pearson’s strategy to tap the substantial market for learning among globally minded business people.”
Time will tell if the story is true – but the pink’un is hardly a liability that needs to be shifted. If we owned the FT, we wouldn’t want to get rid of it yet. Talking of which: any chance, Pearson…?