FT chief executive says high purchase price will not lead to future cost-cutting from new owner Nikkei - Press Gazette

FT chief executive says high purchase price will not lead to future cost-cutting from new owner Nikkei

Financial Times Group chief executive John Ridding has given assurances that the high purchase price agreed with Nikkei will not lead to future cost-cutting.

Japan-based newspaper and media group Nikkei yesterday agreed to pay £844m for Financial Times Group in a deal which does not include Pearson's 50 per cent share in The Economist magazine.

The price is 35 times larger than last year’s stated operating profit of £24m for FT Group.

Press Gazette asked Ridding last night what assurances he could give the FT’s 500 journalists that Nikkei will not seek to cut costs in order to recoup its high outlay for the business,

Ridding said that the FT was “always looking to maximise efficiency” but he added that new owner owner Nikkei was “taking a long-term view of this project”.

He added: “They see opportunity for growth of the FT particularly in the US and Asia. If you look at the way they operate they take a long-term view.

“They want to build up the FT and the grow the business. It’s about investment and growth, not about cost-cutting.”

In a conference call with journalists last night, Pearson chief executive John Fallon declined to comment when asked whether the FT was sold in an “auction” yesterday.

There were reports earlier in the day that German publishing group Axel Springer was ahead in negotiations.

London staff were invited at 3.30pm yesterday to attend a meeting at 4pm when management briefed them about the Nikkei deal and fielded questions. Editor Lionel Barber then addressed journalists in the newsroom at 5pm.

Journalists at the Financial Times have an officially recognised National Union of Journalists chapel.

Press Gazette understands that its priorities are to protect jobs, employment rights and the FT’s editorial independence.

It also has concerns about the company pension fund. Yesterday, Pearson announced it was paying £90m towards the pension fund deficit following the deal.

Financial Times NUJ father of chapel Steve Bird said: “The FT chapel will do whatever it takes to protect jobs, employee rights and independent, quality journalism. We were all very concerned at the speed at which the deal seems to have been made.

“The chapel is now considering putting together a charter setting out our principles on editorial independence and working practices."

NUJ national organiser Laura Davison said:  "A normal day at work turned into a Thursday shock for FT staff, with speculation and rumour turning into chaos and confusion as another publisher was named as the owner in the afternoon before the announcement was made. Now, NUJ members will need rapid assurance and guarantees on working arrangements, terms and conditions and editorial safeguards. If Nikkei wants to maintain the newspaper's international reputation, it must invest in the journalism and the staff.

"Members will also want to understand the situation on the pension contribution. Staff who have put so much into the company should properly share in its achievements. The company’s greatest asset is its staff – and NUJ members at the FT want the best possible future for the quality content they produce."



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Author: Dominic Ponsford

Dominic Ponsford is the editor of Press Gazette