Not long after he took over as president of Japan’s dominant business newspaper in April, Naotoshi Okada delivered a message to his 1,300 reporters and editors. It was time, he said, for “Nikkei”, the muscular but domestically focused broadsheet, to attain the global influence it had long craved.
The model he envisioned: the British newspaper The Financial Times. “I want us to stand side by side with newspapers in Europe and America,” Okada said in a private address to the staff. Adding that he wanted columnists “whose advice is sought by the world’s central bankers,” he named The Financial Times’ respected economics editor, Martin Wolf, as an example.
With the announcement that Nikkei would buy The Financial Times from its British parent, Pearson, for $1.3 billion (Dh4.7 billion), Nikkei has committed sizeable resources to bringing Okada’s journalistic touchstone under its roof. The acquisition took the media world by surprise and has left many wondering how Nikkei — a 139-year-old publication read faithfully by millions of Japanese office workers but almost no one else — will manage its smaller but more cosmopolitan prize.
The deal comes at a time of anxiety in the Japanese newspaper industry, where the huge circulations historically enjoyed by the leading dailies are beginning to creep downward, exposing weaknesses such as underdeveloped digital-publishing platforms and a general newsroom insularity.
“Japanese newspapers have the largest circulations in the world, but it’s an almost entirely local industry,” said Yasunori Sone, a media studies professor at Keio University, citing cultural barriers that helps keep foreign competitors out and the domestic press looking inward.
Many former Nikkei journalists expressed doubts that The Financial Times would be more than an expensive trophy asset. Shoji Otsuka, an award-winning Nikkei veteran who has waged public battles with its management and is no longer at the paper, was one of several who likened the acquisition to the purchase of Rockefeller Centre by the Japanese property company Mitsubishi Estate at the height of Japan’s financial bubble in 1989.
“They’re just buying an aspiration,” Otsuka said.
Big symbolic shift
Others see more potential for Nikkei to take advantage of The Financial Times’ strengths, especially in international reporting and online distribution. “The FT is one of the world’s few truly global papers,” Sone said, “and buying it is a big symbolic shift for Nikkei.”
Nikkei started an English-language weekly, The Nikkei Asian Review, in 2013, after several previous unsuccessful English-language ventures. A senior Nikkei journalist familiar with the company’s management strategy said Okada was “prepared to lose a billion yen” — roughly $8 million — “every year for a decade” on the start-up in the hope of nurturing it into a prominent regional publication, a goal he could never be sure of achieving.
The Financial Times instantly gives him an established international news organisation.
The contrast between Nikkei’s low global profile and its outsize presence at home is stark. The paper has nearly 3 million print subscribers — more than any US daily and 10 times the number who thumb though The Financial Times’ salmon-coloured pages. It prints twice a day, and readers can supplement their morning and evening Nikkei with business programmes on the paper’s television network, TV Tokyo; receive instant news alerts from its wire service, Nikkei Quick; and check their investments on the Nikkei 225, the benchmark stock index compiled by the company.
Nikkei also publishes magazines and industry-specific trade journals, owns a credit-rating agency and runs one of Japan’s major think tanks, the Japan Center for Economic Research. The company earned a little over $80.7 million in net profit last year on revenue of about $2.4 billion, but because it is privately held and its disclosures are limited, it is difficult to know which of its many businesses made money and which did not.
Politics and economics
The Centre of the empire is the newspaper, whose employees are the company’s sole shareholders. Outsiders and even staff at non-newspaper subsidiaries are not allowed to buy in.
Virtually all its journalists join straight out of Japanese universities. Most stories are produced by teams of writers and editors and are presented without bylines.
The paper has small sports and culture sections, but its specialities are politics, economics and — above all — news about Japanese companies. From the multinationals to their tiny suppliers, Nikkei covers thousands of them from more than 50 domestic bureaus in a country that is slightly smaller than California.
Important companies are blanketed with reporters: Toyota has half a dozen Nikkei journalists assigned to it in and around its base in the city of Nagoya, and several more covering it in Tokyo.
Otsuka, the former Nikkei reporter, said companies saw the newspaper as a friendly place to leak information on acquisitions, new products and financial results. “The vast majority of the scoops are leaks,” he said. Companies expect positive coverage in return, he added, and fear being ignored if they do not cooperate.
“Reporters will tell you that if you don’t give a story to them exclusively, they won’t write it at all,” said a public relations official at a prominent Japanese company that invests and trades in commodities.
Stock market regulators in Japan have begun warning companies against leaking certain kinds of information, particularly financial data — another reason Nikkei may see its traditional territory narrowing. Last year Bloomberg, which competes with Nikkei for financial scoops, counted 45 instances in which Nikkei reported a company’s year-end financial results before they were officially announced.
Nikkei’s hunger for scoops, its critics say, does not extend to the kinds of articles that newspapers in other countries like best — those that expose serious wrongdoing. It is rarely the first to report a true corporate scandal.
At a news conference on Friday, Okada acknowledged that Nikkei was “slow out of the blocks” on what was perhaps the most notorious recent example: coverage of a $1.7 billion accounting fraud at Japanese camera maker Olympus four years ago.
Online access
Nikkei has also been slow to adapt to the digital age, a problem that other Japanese dailies are also dealing with. The large print readerships of Japanese papers have led to added complacency, experts say.
Nikkei did not make online access available to readers without a print subscription until 2010, and its digital readership of 430,000 is just one-seventh that of its print base — a worrying ratio when younger Japanese, like their counterparts elsewhere, are increasingly turning to mobile devices for their news.
In contrast, the smaller Financial Times, which has adopted an aggressive digital-first strategy, has more than twice as many online readers as it does print subscribers.
Joint development of digital platforms could help Nikkei catch up, Sone said. Unlike Pearson, Nikkei is insulated from the financial pressures of being a publicly listed company, and its sheer scale may allow it to make investments that could benefit both papers.
“Globalisation and digitalisation are the things Nikkei is after most,” Sone said.
