By Dominic Jones | Published: May 15, 2007 | 
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Thomson-Reuters: mixing journalism with PR?
By Dominic Jones
EARLY this morning, the boards of Thomson Corporation and Reuters Group PLC announced that they have agreed to combine their companies.
Reuters CEO Tom Glocer, 47, will become CEO of the new Thomson-Reuters. Thomson President and CEO, Richard J. Harrington, 60, will retire after the deal closes, which is expected after anti-trust clearances are obtained.
The Thomson Financial unit, which includes the corporate services business that helps companies promote themselves to investors and the media, will become known as Reuters and be merged with the Reuters financial and media business. Current Reuters COO Devin Wenig will become CEO of the Reuters business, with Reuters Editor-in-Chief David Schlesinger continuing in that role.
Unbiased news, unfiltered corporate PR don’t mix
Now here’s the important bit as far as IR Web Report’s readership is concerned:
Thomson-Reuters will adopt the Reuter Trust Principles. Woodbridge, the Thomson family company which will own 53% of the new company, has agreed that it will use its voting control to support the principles.
One of those principles is that “the integrity, independence and freedom from bias of Reuters shall at all times be fully preserved.” Another is “that Reuters shall supply unbiased and reliable news services” to its customers.
And that’s got me wondering. Where does the Thomson Financial corporate services business — which includes corporate Public Relations and Investor Relations services — fit in the combined new Reuters division?
These services are essentially PR for businesses. They offer to do things for companies like:
- “Differentiate and humanize your brand”;
- “Engage and educate your audience with a presentation as unique and powerful as your message”;
- “Deliver a unified message” and “communicate consistently to all audiences (media, investors, employees, customers)”;
- “Maximize all of your corporate communications outreach efforts”; and,
- Improve “the comprehension and retention of your message.”
That doesn’t sound like unbiased, independent news. Last time I checked, journalism and PR are not the same thing. They don’t mix, not at least at any self-respecting news organization.
Yet, under the structure announced by the companies today, the Reuters business will have departments which essentially exist to promote companies’ unfiltered information to journalists and the investment markets.
That’s a bit of conflict, and as a journalist I would be uncomfortable with it, as Reuters’ journalist unions are.
For additional comprehensive coverage, see the FT’s Alphaville blog, which includes a letter to staff by Tom Glocer, one by Editor-in-Chief David Schlesinger and an overview of the deal’s details.
According to FT Alphaville, one source says up to 3,000 employees will lose their jobs as a result of the combination.
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May 15th, 2007 at 1:36 pm
Funny how in the tom-glocer-this-may-scare-you-blog uncle Tom puts shareholders before clients. Funny that!
May 16th, 2007 at 9:40 am
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May 24th, 2007 at 7:08 am
I agree with you about the fundamental conflicts resulting from the purchase. Could there also be a hint of desperation in Thomson’s move.
Thomson’s professional publications business is under stress. On the revenue side both advertising rates and advertising customer numbers are under pressure because of the new alternatives being presented by the internet. Professional journals have printing costs and not all the content is valued by all readers so content costs are higher than more focused web based alternatives where advertisers just pay for the eyes they want. Also, if writers can go direct to their readers through their own specialized sites they dis-intermediate the traditional publishers like Thomson. Professional journals will still have their place but the business model is no longer as robust as it used to be. If in response the professional publishers choose to go on line they weaken what used to be their major barrier to entry; the exorbitant costs associated with start-up magazines because of printed but unread product and the costs of building an advertising base. New web based professional sites should be able to get advertisers quickly if they have an audience. The mainstream publishers may not be able to reap the same revenues on-line that they used to achieve off-line.
Thomson’s data services are low value added. They gather and package information which is readily available to any competitor prepared to go to the same trouble. New competitors will emerge because the cost of gathering and packaging information is falling dramatically. There are now more ways to access analyst research, consensus earnings numbers, share price information etc and much of this product is now free or at least cheap compared to Thomson. The direction things are taking is probably keeping the Thomson exec team awake at night.
Thomson has to move up the value chain. They need to find new high value added content that can be packaged with the data and professional services businesses they already offer. Ideally this content should offer better protection than the data collection based products they now have. The acquisition of Reuters could provide this. Duplicating the Reuters infrastructure and building an equivalent brand would be very expensive for Thomson or anyone else.
It just shows how the internet is a blessing for most of us but maybe a curse for a few, Thomson included.
Peter Schiefelbein
Author of Investor Relations Aware Blog
October 25th, 2007 at 9:44 am
[...] acquisition of Reuters Group? As I wrote in May, Thomson Financial’s corporate services unit does not seem to fit well within the proposed structure of the new combined Thomson Financial-Reuters [...]