The Sale of the Financial Times: a fraught future?

Denis LyonsThe Sale of the Financial Times: a fraught future? by Denis Lyons 

The recent sale of the FT to Nikkei Group has passed off without too much comment or fuss from the mainstream press in this country. Pearson Group's reasons for the £844 million sale seem plausible; half year losses of £112 million and the need in the words of the CEO (John Fallon) to be part of a global digital news company. Nikkei's earnings of £82 million in 2014 (compared to £24 Million for the FT), 2.75 million circulation last year (as against 737,000 for the FT) and assured global reach would seem to suggest the perfect fit between the two companies from a purely business perspective.

However, long-term readers of the pink one may have some cause for concern. Editorial independence, journalistic integrity, in-depth analysis, balance and an honest attempt at objectivity have long been hallmarks of the paper. There is also the bight and trenchancy of its commentators as well as the wide range of opinion represented on its pages. Much of this may now be in peril as these are not journalistic values associated with Nikkei. Whilst it is true that it has a reputation for sound financial reporting, it favours the soft pedal on truly important issues like major financial scandals, and the supine attitudes to be found throughout Japanese business. The recent Olympus scandal involving concealment of 117 billion Yen in losses was not on its radar. The story eventually broke in the FT, but only after the British CEO of Olympus, Michael Woodford, had, in his own words, been ignored by the mainstream Japanese press including Nikkei. Would the same story be allowed to break today or in a few years down the line? In considering this question we should also look at the paper's cosy relationship with the Japanese establishment and its uncritical endorsement of “Abenomics” the economic philosophy of the current Prime Minister: Shinzo Abe.

How long before these unquestioning attitudes begin to seep into the writing and editorial content of the FT? Much will depend on how the inevitable culture clash between the Japanese and British sides of the new organisation pans out.

It is clear that a culture of secrecy and deference to authority are endemic in the Japanese Corporate world and at the heart of recent scandals like the one involving Olympus. The recent Toshiba case is another in point. Here, earnings were over-reported by $1.2 billion. This illustrates the dangers of such attitudes. Toshiba executives felt they should not question superiors or targets set from above. This led to a failure to report unmet targets on a grand scale.

The corporate world is not that of print journalism, of course, and it could be argued that a different ethos prevails in the Media. However, the last decade or so has seen the increasing commodification of journalism and newspapers run more and more like “proper” businesses. The real test for the FT will come when Japanese executives are appointed to the board of the new company. Will the paper's values survive the clash of cultures? Another Olympus or Toshiba may be the only way to tell.