Why Reuters Should Buy The Farm The Fiscal Tidings Business

 That's the headline TalkingBizNews used to tease this storey past times Felix Salmon at recode, March 16:

Reuters only got $10 billion to construct a sustainable intelligence business. How should it pass it?
Reuters News only won the lottery. What volition it produce alongside all that money?

It’s the biggest assignment inward journalism: Take a set-in-its-ways 167-year-old intelligence organisation in addition to reconfigure it radically hence that it tin compete on the global phase against countless immature digital upstarts. If it’s done right, billions of people could destination upwardly alongside trusted, independent, impartial intelligence they would never otherwise accept had access to. On the other hand, if it’s done incorrect — or if it’s non assigned at all — hence 1 of the world’s close storied newswires mightiness endure entering its finally years.

Welcome to Reuters, the intelligence means which faces, today, the close epochal determination inward its history. If it doesn’t scale back, radically in addition to quickly, its total financial-news offering, hence inward xxx years’ fourth dimension it volition endure on life support. If it does brand the change, however, hence it tin non exclusively relieve itself; it mightiness fifty-fifty endure able to assistance transform billions of people’s access to trusted news.

Opportunities similar this don’t come upwardly along real oft — indeed, to a initiatory of all approximation, they never come upwardly along. But now, cheers to a $17 billion M&A bargain inward which person equity giant Blackstone is taking over the Thomson Reuters financial-terminal business, Reuters News (which is non purpose of the deal) has flora itself inward possession of an astonishing $10 billion lottery ticket. The catch: This lottery ticket is timed to self-destruct. 

Reuters, from its very kickoff inward 1851, made its cite past times delivering fast in addition to accurate information to both newspapers in addition to the fiscal markets. Over the years, the fiscal information purpose of the trouble concern grew to dwarf the intelligence business, in addition to the billions of dollars inward revenue thrown off past times fiscal terminals accept helped to pay for a global intelligence performance that at in 1 lawsuit employs to a greater extent than than 3,000 journalists inward some 200 locations to a greater extent than or less the world. 

But in 1 lawsuit the terminal trouble concern becomes controlled past times Blackstone, led past times Stephen Schwarzman rather than past times Thomson Reuters, that trouble concern has much less incentive to pay Reuters hundreds of millions of dollars a yr for its news. After all, Thomson Reuters had pregnant command over what Reuters covered. By contrast, Reuters volition in addition to must accept consummate editorial independence from Blackstone.

The resultant is that if Schwarzman wants to rely on a intelligence operation, he’s either going to construct 1 of his own, similar his swain billionaire Mike Bloomberg did, or else he’s going to contract alongside a intelligence provider who volition allow him specify just what he wants to pay for. The days when Reuters could rely on fiscal information terminals to pay for its global newsgathering are at in 1 lawsuit numbered.

That would endure bad intelligence indeed for Reuters, were it non for 1 thing: As purpose of the deal, Blackstone has agreed to pay Reuters at to the lowest degree $325 1 grand m a yr for its news. Better yet, that payment is guaranteed for at to the lowest degree xxx years. That’s a minimum of $9.75 billion inward full — the form of coin close intelligence organizations tin exclusively dream of. (To position that release inward context, the Washington Post was bought past times Jeff Bezos for $0.25 billion.)...MUCH MORE

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Why Reuters should instruct out the fiscal intelligence business