Pearson, the owner of salmon-colored Financial Times, said it is in "advanced discussions" to sell the newspaper, which would end years of speculation about the fate of the daily capitalist bible.
Pearson warned that "there is no certainty that the discussions will lead to a transaction," but speculation is already rife about potential buyers, including Bloomberg — which has long been rumored to be interested in the FT — and German media conglomerate Axel Springer.
Previous reports suggested the value of the FT at around £1 billion, but many analysts say now that is improbably high.
The Financial Times was founded in 1888, and Pearson has owned it since 1957. The FT Group, the corporate entity that shelters the FT within Pearson, also includes 50% ownership of The Economist. That stake will also be sold along with the FT, Bloomberg reported.
A passel of press reports tried to pin down the name of the buyer. Reuters coyly suggested it is a "global digital news company," which would rule out dead-tree rivals like the New York Times,Wall Street Journal and others. In the past, Reuters was also considered a candidate to buy theFT, due to their common interest in financial news.
Rumors have abounded for years that Pearson, an education company, would jettison the FT, but former Pearson CEO Dame Marjorie Scardino always denied that the prestigious paper would leave, even going so far as to say the FT would be sold "over my dead body." Scardinostepped down from her perch at Pearson in 2013, and her successor John Fallon reiterated that the FT was "valued and valuable" to the company.
The advantages enjoyed by the FT include its prestige and its committed business readership, which opens the door to luxury ads and lavish coverage of private planes and expensive watches in supplements such as "How to Spend It," which advises capitalists of how to dispose of their millions.
In its statement, Pearson was subtly responding, appropriately enough, to a report by Bloomberg News staff earlier this week that the company was seriously pursuing a sale of the FT.
The Financial Times, however, has struggled, as a lot of legacy media companies have, with embracing digital distribution and the sometimes obscure ways of Internet readers. Advertising revenue is normally far lower per ad for most digital news than it is for big, splashy newsprint and magazine pages. That has forced media executives to reconsider all the ways in which they had been used to doing business, which are no longer adaptable to a digital world.
Digital turnarounds tend to be long and expensive, as the revenues of the New York Times show, and many doubted that Pearson, despite its stated love for the FT, had the money or inclination to invest in its modernization. FT reporters have long felt that expense cuts at the paper were in preparation for a sale.
Two years ago, Pearson sold off the financial trade publications that had been part of the FT Group, including Mergermarket.
Pearson will announce its latest earnings on Friday. They will be closely watched for details, or even potentially the official announcement of the deal.
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