The owner should also have a very long time-horizon — ideally into perpetuity. A storied reputation is easy to lose and very, very hard to regain, and any attempt to squeeze cash out of a newspaper in the short term tends to destroy precious brand value. The ultimate goal is steady profits over the long term, from a sustainable business with relatively little debt.
Finally, newspapers should be owned by news organisations. News is not a business like any other, and the kind of management that works in non-journalistic organisations rarely bears much fruit when people start trying to apply it to journalists.
Let’s rejoice, then, that The Financial Times, founded in 1888 and one of the world’s great newspapers, has been bought by Nikkei, another great financial news company. Nikkei is employee-owned, and has been around since 1876. It’s not for sale, and it isn’t anybody’s financial investment: Its only purpose is to put out an excellent news product every day. It does exactly that, making a decent operating profit of more than $100 million a year. The Nikkei, its flagship newspaper, has a combined print and digital paid circulation of 3.1 million — four times the equivalent figure for The Financial Times, which is 737,000.
Nikkei, indeed, could be a much better owner for The Financial Times than Pearson, which bought the newspaper in 1957. Pearson is an enormous global education company that made £470 million last year: The Financial Times’s £24 million in operating income was always something of an afterthought, and the brand was kept within the corporate stable mostly for reasons of pride and inertia. There was no synergy, let alone a love or even understanding of the news business.
While Pearson starved The Financial Times of investment in the United States, for instance, there’s a good chance that Nikkei will want the paper to become a real force here. And while Pearson’s main contribution to The Financial Times was its neglectful hands-off attitude with respect to the news operation, The Financial Times now has the opportunity to export its own aggressive approach to business stories, especially in Japan, to an owner that has historically been more deferential toward big business.
Nikkei is certainly paying a lot of money for The Financial Times — the price, £844 million, or $1.3 billion, is a whopping 35 times the paper’s operating income. But Nikkei can afford it. And in buying The Financial Times, Nikkei is gaining access to one of just a handful of newspapers in the world that has successfully managed to navigate the transition to a digital subscriber base. That transition is only just beginning in Japan, which means that the stakes there could not be higher. If The Financial Times’s experience helps Nikkei make fewer mistakes and remain a must-read for people who prefer phones to broadsheets, then that alone will justify the outlay.
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