It can be startling when iconic brands go on the sale block—all the more so when the buyer is from another country, and still more when the price tag seems pegged to factors divorced from financial reality. With yesterday’s $1.3 billion sale of the venerable Financial Times to Japanese media firm Nikkei, we get the full dose of disorientation—but also a surprisingly encouraging outcome.
Just two years ago, Amazon’s Jeff Bezos paid $250 million for the Washington Post, which at the time had a circulation of 472,000, and a $53 million loss in the prior year on $582 million in revenue. Today the FT is reporting combined print and digital circulation of 737,000; it earned £24 million ($34 million) of operating profit on £334 million ($518 million) revenue last year, according to the Wall Street Journal. (The Journal itself, of course, was sold to Rupert Murdoch for $5 billion in 2007, before the technology of the Internet and the financial crisis combined to send the newspaper business spiraling.)
Although facing the same advertising declines as the rest of the industry, the FT has come through with quite a bit more circulation, and more income, than the Post had. But is the FT truly worth five times as much as the Post, under an arguably worse print landscape than even two years ago?
One has to presume that a major factor was the personalities in the negotiating room. Maybe the FT’s owners at Pearson, the London-based media company, had better negotiating chops than former Post owner Donald Graham; maybe Nikkei simply wanted the cachet of the FT more than Bezos wanted the Post’s.
And this brings us to the encouraging aspect of the FT sale, namely the message it sends about the ongoing value of quality print media—and the tremendous blunder other outfits have committed in slashing staff, dumbing down coverage, and retreating from hotbed areas for news.
In the years before its sale, the Post degraded its reach by closing foreign and domestic bureaus; it still won Pulitzer Prizes, but seemed to be carefully picking its big subject areas rather than presenting itself as a paper of record.
The FT, conversely, remains far-flung. Its coverage of Russia, China, the Middle East, and key sectors like oil, for example, is among the best in the world; despite the carnage in the industry, it has continued to put out a must-read product. And the message sent by the price that Nikkei agreed to on July 23 is that this is still something worth paying for.