The sale of the London-based newspaper, the Financial Times, by Pearson, the British education company, to the Japanese media group Nikkei is a triumph for globalisation. As with the sale of Jaguar Land Rover to the Tatas years ago or even the much less-trumpeted moment earlier this year when Apple's iPhone sales in China (where the workers who make the phones reside) surpassed its total sold in the United States, these markers of a more integrated world are rightly celebrated. It may be considered relevant that the Financial Times was itself an investor in Business Standard in the past, owning a 14 per cent stake in this newspaper for a short period. There is little place for nativist reaction in such matters, such as that of The Guardian newspaper, which chose to describe itself as "British owned", just above its masthead the day it reported the sale.
There is also a strong business logic to the FT being owned by a media company. Pearson long regarded the FT as a trophy on a mantelpiece; it was almost peripheral to its core business, and so the company was often criticised for not having a long-term strategy for the newspaper. A media company such as Bloomberg, thought to have been a suitor a few years ago, or even Time Inc, might have made a better business of the marquee value of the FT. For proof, consider the reputedly higher profitability of The Economist, which is only 50 per cent owned by Pearson and is managed independently and marketed more aggressively. Still, the FT was a pioneer in protecting its journalism by building an innovative paywall - more than 500,000 of its 737,000 subscribers pay for the digital edition.
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Aside from this digital success, Pearson's other business flourish with regard to the FT has been the selling of it. It has been paid $1.3 billion for a business with $518 million in revenues and operating income of $37 million. Having shelled out all that money, Nikkei is unlikely to smash this trophy. Just as Rupert Murdoch has left the Wall Street Journal largely unchanged in terms of the rigour of its superb long-form reporting and the stridency of its right-wing editorials, Nikkei will probably leave the FT as it is.
Media businesses, of course, earn goodwill in the non-accounting and accounting sense based on the manner in which they speak truth to power. Nikkei's assertions that its values are similar to those of the FT - the combined digital and print circulation of The Nikkei newspaper are four times that of the FT - ought to be taken at face value, but doubts remain. Commentators have pointed out that in a society as conservative as Japan's, the media has traditionally been restrained about investigative journalism. They point out it was left to the NYT to reveal that a Japanese company had been making dangerously faulty airbags for years. And it was the FT itself that revealed in 2011 that the Japanese company Olympus had concealed losses of $1.7 billion in a spectacular accounting fraud. Nikkei merely followed, rather than led, such coverage. Interestingly, the FT's Tokyo bureau chief then was not British but Canadian - just as today the FT heads of bureau in Brussels, Beijing and Sao Paulo are American, Kiwi and Australian respectively; and the FT's hardnosed chief economics commentator has written that there are few individuals he admires more than Manmohan Singh. Agree or vociferously disagree, but it is this natural cosmopolitanism, more London than Britain, that should and likely will continue to shine as a trophy of internationalism is passed to its new Japanese owner.
CLARIFICATION
An earlier version of this Editorial Comment had said that FT has 720,000 subscribers instead of 737,000 subscribers. The error is regretted.