- May take 20 years to judge success of expansion into West
- CEO Kita: `It was not something we saw as too expensive.'
Nikkei Inc.’s chief executive officer is taking the long view -- the very long view -- on the Japanese publisher’s $1.2 billion purchase of the Financial Times last year.
While the deal took just five weeks to come together, Tsuneo Kita says it may take as long as 20 years to judge Nikkei’s investment in the pink broadsheet. That’s 2035.
The July purchase, after a heated bidding war with Axel Springer SE, gives Nikkei an important foothold in business journalism in the West, Kita said, adding that Nikkei had first expressed interest in buying the newspaper in December 2012.
“We needed global development and we need the FT for that,” Kita said at the FT Digital Media conference in London on Wednesday. “It’s not something we saw as too expensive; it was something we needed.”
The race last July between Nikkei, Germany’s Axel Springer and other suitors for FT Group showed that top-tier media properties can still attract intense interest, even as digital competitors upend journalism. Competition with Springer came so close to the wire that the FT’s own homepage was still reporting the German group as the leading bidder after closely held Nikkei had announced its deal. Nikkei made a knockout last-minute offer about 100 million pounds ($142 million) higher than its rival to clinch the deal, according to people familiar with the matter at the time.
While Springer has since said the price for the FT was too high, Kita said Wednesday his company has a 10- to 20-year timeline to view the success of its purchases. Now, armed with the FT, Kita said Nikkei must work together with companies like Google, Facebook Inc. and Twitter Inc., which have transformed the media industry.
“I believe Nikkei and the FT are uniquely positioned, and it all comes down to journalism,” he said.
Journalists at the FT called off a planned strike in February after management made a new pension offer, the Guardian newspaper reported earlier this year. The workers had voted in favor of a 24-hour strike over Nikkei’s plan to scrap the paper’s final salary pension plan.
Pearson Plc’s 58-year ownership of the FT Group ended when it agreed to sell the salmon-colored paper and other properties. Divestments including the sale of its stake in the Economist magazine ended Pearson’s news publishing involvement and gives it more firepower to turn around its education business.
Financial Times CEO John Ridding, also speaking at the conference, credited Pearson for doing the right thing by selling the newspaper, as the company shifted focus solely to education. He also said print media is experiencing sharp structural and cyclical changes and that the decline in print advertisements is "pretty hairy."