Pearson CEO Scardino out; what next for FT?

Her company made £2 billion ($3.1 billion) in digital content revenue last year. Now Financial Times publisher Pearson’s CEO Marjorie Scardino is leaving the company after 15 years.

Scardino will be replaced from January 1 by John Fallon, CEO of Pearson’s international education business, responsible for the company’s emerging-markets growth.

Liberum Capital analyst Ian Whittaker tells Bloomberg: “Marjorie Scardino was a big fan of the (FT) group, John Fallon has no emotional commitment.”

But that comment is a stretch to Bloomberg reporting the move “spurring speculation that the company may sell the Financial Times newspaper unit”.

It is Bloomberg which could be a bidder for any FT that might be for sale.



Michael Wolff in February reported pot-stirring dinner party chatter about a sale to Bloomberg or Thomson Reuters – then denied to paidContent by CEO John Ridding:

“My reaction was surprise. Pearson are very much committed to the FT. If you look back at the big moments in our history, that’s been clear.

“We’re plugged in to Pearson in an increasingly direct way. We see significant potential for the FT and Pearson through education.

“We are developing tools for professors and students to annotate FT articles. Case studies in business school books are pretty old but, every day, the FT front page is an interesting business case study.”

Bernstein Research analyst Claudio Aspesi today writes:

“Some of the items that will be part of the agenda of the new CEO should include … what to do with the remaining assets which are not directly supporting the growth of education (such as the FT Group and Penguin). This may lead to unlocking value hidden in those assets.

“We believe that continued focus on digital products in Education could be the key to unlocking a step change in valuation, such as reaching a £30 (share price) target by 2020.

“While most of the revenues should be relatively stable irrespective of changes in economic activity, the FT Group (and the FT newspaper in particular) is more sensitive to the cycle, and none of the businesses is fully insulated from a deep and lasting slow down of economic activity.”

The Financial Times has shown how it can successfully charge for digital business news content, but Pearson mostly delivers education content and services.

Speaking with journalists on Wednesday (via Guardian), Fallon described the FT as “valuable” but did not rule out a sell-off:

I think the FT is a highly valued and very valuable part of Pearson. I think the Pearson strategy is very much the FT strategy.

“If you look at digital transformation of the FT over the last few years, that is leading the transformation of the digital publishing industry. My attitude to the FT is that it is a valued and valuable part of the company.”