Pearson Plc is planning to explore a sale of the Financial Times newspaper as the company focuses on its faster-growing education business, people with knowledge of the situation said.
The company has decided to consider offers for the newspaper this year, said the people, who declined to be identified because the process is private. Pearson may initiate sale preparations ahead of the departure of Marjorie Scardino, the chief executive officer, who is stepping down in January, said one person. Pearson hasn’t hired an investment bank to advise on the sale, the people said.
A couple of things. First, “planning to explore a sale” is weak language. Second, Pearson says it’s not true, telling The Guardian that “This particular Bloomberg story is wrong,” which, whether you buy it or not, at least is a bit firmer than Bloomberg’s wiggly words.
But with Pearson’s CEO leaving, it’s one to watch.
— Cross-file this one under innumeracy, misleading statistics and poor journalism. CNSNews calculates how much U.S. debt per capita would be if, for some reason, it had to be paid only by children. Matt Drudge, a font of false and misleading information, links it with this false headline. It’s a pretty good example of why reading Drudge makes you stupid:
GENERATION DEBT: Every American Under 18 Now Owes $218,676…
Even CNSNews’s story doesn’t say that. Here’s how it puts it:
If Americans under the age of 18 were required as a group to pay off the entirety of the federal government’s debt in equal shares, each would now need to pay about $218,676.
Calculating this stat makes zero sense. It requires you to wonder how much kids would owe if every adult suddenly croaked and all their assets were vaporized. If that happened, I’m pretty sure paying off those T-bonds would be the least of the kids’ worries.
As I write this, this story has now been tweeted more than 1,900 times.
— Read this fascinating New York Times piece by Harvard Clayton M. Christensen on the “Doctrine of New Finance” and how it has undermined the American economy.
It’s a take on financialization and why businesses have overinvested in efficiency while underinvesting in innovating new products over the last few decades:
The answer is that efficiency innovations are liberating capital, and in the United States this capital is being reinvested into still more efficiency innovations. In contrast, America is generating many fewer empowering innovations than in the past. We need to reset the balance between empowering and efficiency innovations.
The Doctrine of New Finance helped create this situation. The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap. When the doctrine emerged in stages between the 1930s and the ‘50s, capital was relatively scarce in our economy. So we taught our students how to magnify every dollar put into a company, to get the most revenue and profit per dollar of capital deployed. To measure the efficiency of doing this, we redefined profit not as dollars, yen or renminbi, but as ratios like RONA (return on net assets), ROCE (return on capital employed) and I.R.R. (internal rate of return)…
But we’ve never taught our apprentices that when capital is abundant and certain new skills are scarce, the same rules are the wrong rules. Continuing to measure the efficiency of capital prevents investment in empowering innovations that would create the new growth we need because it would drive down their RONA, ROCE and I.R.R.