Breakingviews, the business commentary service known more for its influence than its size, is in talks with Thomson Reuters (NSDQ: TRIN) on a sale, according to Dealbook. We haven’t confirmed it yet, but considering the direction Reuters is going in with its commentary hub, it seems likely that the two companies would be talking, if only for a partnership. The story first surfaced in Times of London, though I couldn’t find any online version of the story. It said that the London-based firm has hired boutique investment bank Perella Weinberg Partners to look at interest. Updated: Thomson Reuters would not comment on this, but sent me a statement: “Thomson Reuters remains committed to its innovation agenda, which includes investments in news and commentary initiatives. Which could be read either way.
The service was founded in 2000 by Hugo Dixon and Jonathan Ford, both of who worked for the FT’s influential Lex column before starting this. The company now has about 40 employees, and its columns get syndicated to the NYT in U.S., the Telegraph in the UK, Le Monde in France and others. From what I understand after speaking to some sources, its revenues are in the $10 million-and-above range, with about three-fourths of that coming from the banks and other financial institutions that subscribe to the online service, most of the rest coming from media syndication, and a tiny bit from advertising (it has ads in its online video service, for instance). It was profitable for the first six months of this year, as the NYT story points out, even as the financial industry imploded all around it, though unlikely that they would have been able to keep the same number of clients, or margins.
Last year, there was some controversy after WSJ Europe, which had run it daily for eight years, dropped it last year as its tried to build its own opinion hub under the “Heard On The Street” brand. WSJ owned a 7 percent stake in the company and there was rumor that it wanted to sell its stake, but that hasn’t happened yet. As it discloses on the site, it has about 40 shareholders (most of them employees and board members).
So the talks with Reuters comes at a time when the biz info giant is looking to build up its opinion/commentary hub, has started a number of blogs and hired away Felix Salmon, the former editor at Portfolio, as one of the leads, under, surprise surprise, Jonathan Ford, the co-founder and former deputy editor of BreakingViews (some more details on that here). And by the way, this Commentary hub is not a Reuters Media project, but a Thomson Reuters corporate project, which gives it more heft and urgency. Hence the talks with Breakingviews, if true, mean that Reuters’ own efforts aren’t bearing fruit as quickly as they thought.
Meanwhile, Felix writes a rather blistering piece on his own Reuters blog, laying out reasons why his company should not (and will not) buy Breakingviews (he says he has no direct knowledge of the talks). He says that the company isn’t doing that well with a subscription model in a collapsed financial industry, and Reuters’ model of free add-on commentary to its terminals (and giving it free on Reuters.com website a bit later) is the best model in the link-based economy going ahead. To which, someone in the comments (likely a Breakingviews exec) does an equally blistering fisking of Felix’s piece. Lotsa fun to watch this develop…
By Rafat Ali