Tech giants like Amazon and Microsoft could come calling — but finding a fair price could be difficult
Former New York City mayor Michael Bloomberg’s campaign has been clear that if he is elected president, he plans to sell his namesake Bloomberg Media. But it’s less clear who would be prepared to purchase the privately owned business-news giant — and for how much.
“There will be no confusion about any of his financial holdings blurring the line between public service and personal profiteering,” Bloomberg campaign adviser Tim O’Brien told Christiane Amanpour Tuesday on CNN before pivoting to swipe at President Donald Trump: “We will be 180 degrees away from where Donald Trump is on these issues because Donald Trump is a walking financial conflict of interest.”
Experts interviewed by TheWrap suggested that the price tag could be between $50 billion and $75 billion. Bloomberg Media brought in about $10 billion in revenue last year, according to an estimate provided by Burton-Taylor International Consulting, a division of TP ICAP; the lion’s share of its sales stems from its terminals, which run between $20,000-24,000 per year.
As a result, there should be “plenty of potential buyers” if the former mayor decides to sell, Gabriel Kahn, head of Media, Economics and Entrepreneurship program at USC Annenberg, told TheWrap. The former mayor owns 88% of the company, while Merrill Lynch holds the rest.
Peter Csathy, chairman of Creatv, a tech and media advisory firm, added that Bloomberg could be attractive to companies like AT&T and Amazon because of its tech and content businesses, adding it’s a “seller’s market in the media world” because there’s strong “demand for marquee content.”
IBM, Amazon, Microsoft (which bought LinkedIn only a few years back) and Oracle are all companies that might be interested in Bloomberg Media, Kahn said.
“Remember, they make money, are global, are somewhat immune to platform disruption because they go straight to the customer, and they are so embedded in the worklife of every trader that their customer base is very sticky,” he said.
Still, the nature of the company may dictate who might be interested in the acquisition. “With Bloomberg, you really need to remember that it is primarily a (business-to-business) data platform,” Kahn said. “The public-facing journalism, which is top quality, comes second. No one has come up as a buyer because it’s never been remotely for sale before.”
The cost of acquisition remains a bigger question — particularly if the former mayor decides he needs to unload it quickly, between Election Day and inauguration in January 2021. (When he served as mayor of New York City from 2002 to 2013, Bloomberg kept ownership of the company but gave up his CEO title.)
There are two deals that suggest a rough outline of Bloomberg’s worth, analysts said. Refinitiv, which competes with Bloomberg in the terminal and trading data market, was sold to the London Stock Exchange last year for $27 billion. As the Wall Street Journal pointed out, Refinitiv was acquired at an enterprise value of about 13 times EBITDA — which, if translated to Bloomberg, would put its price tag around $50 billion.
Another precedent Microsoft’s 2016 acquisition of LinkedIn for $26 billion, a year after the business-oriented social-media platform reported $3 billion in revenue. Since Bloomberg’s revenues last year were more than three times that figure, one financial analyst who asked not to be named said that a $75 billion price tag wouldn’t be out of the question.
“The kind of multiple you saw for LinkedIn is relevant, because LinkedIn is a content and tech platform,” like Bloomberg is, Csathy said. “Look, LinkedIn is ubiquitous in the business world and Bloomberg is ubiquitous in the business world. Both are premium brands.”
Still, simply putting a $50 billion-$75 billion sticker on Bloomberg isn’t as easy as it sounds, according to Robert Iati, the director and head of market data for Burton-Taylor. Iati pointed to Bloomberg’s “stickiness,” which he said makes valuing Bloomberg especially difficult. “I don’t think there’s product that has been as sticky as Bloomberg — and that matters,” Iati said.
You can try valuing Bloomberg simply off looking at its distinct businesses or comparing it to companies like Refinitiv, Iati added, but there’s a “trap door” in doing so: You need to account for goodwill, or the intangible value of the brand name and customer base.
“If it was Joe Software Company, sometimes you can replace it. But Bloomberg is the stickiest solution I have ever seen. You’ll hear many of the usual complaints: ‘I wish they didn’t charge so much,’ and so on, but nobody ever leaves,” Iati said. “The risk of them losing considerable (market) share is really small.”
So even if major tech and media companies line up to take Bloomberg off the ex-mayor’s hands, nailing down a price could make this a tough deal to close.