45. Thomson Reuters Corporation
Revenues 2018: $ 5.501 billion (€ 4.660 billion)
The Canadian-British company emerged as the result of a merger between information service provider Thomson and traditional British news agency Reuters in 2007/2008 and went on to become the world’s largest provider of specialised communication services. Just like its major competitor Bloomberg, the service is primarily tailored towards business clients within economical and financial industries. The stock is traded at the New York and Toronto markets. The headquarter offices of Thomson Reuters are located directly at the Times Square in New York.
Thomson Reuters Corporation
3 Times Square
New York, NY 10036
Tel: +1 646.223.4000
Founding year: 1851 (Reuters); 1934 (Roy Thomson buys his first newspaper); 2007/2008 (Merger between Thomson and Reuters)
|Revenues ($ Mio.)||11,166||12,209||13,600||12,543||12,899|
|Profit (loss) ($ Mio.)||3,149||1,311||2,1138||1,881||2,405|
|Tax & Accounting||1.417||1,370||1,243||1.206|
|Intellectual Property & Science||1.005||1,001||982||894|
|Financial & Risk||6,148||6,538||6,648||7.193|
Table III: Segment revenues 2008-2011 ($ Mio.)
*the segment is not listed separately anymore
Table IV: Economic Performance The Thomson Company ($ Mio.)
|Profit (loss) after taxes||292||305||238||198||130||(144)||302|
Executives and Directors
- James C. Smith – President & Chief Executive Officer
- Stephane Bello - Executive Vice President & Chief Financial Officer
- Vin Caraher, President, Intellectual Property & Science
- Gus Carlson, Executive Vice President & Chief Communications Officer
- David W. Craig - President, Financial & Risk
- Carla Jones, Chief of Staff
- Richard H. King, Executive Vice President & Chief Information Officer
- Gonzalo Lissarrague, President, Global Growth Organization
- Neil Masterson, Executive Vice President & Chief Transformation Officer
- Brian Pecarelli, President, Tax & Accounting
- Brian Scanlon, Executive Vice President & Chief Strategy Officer
- Mark Schlageter, Chief Customer Officer
- Deirde Stanley, Executive Vice President, General Counsel
- Susan Taylor Martin, President, Legal
- Peter Warwick, Chief People Officer
Board of Directors:
- David Thomson (Chairman), Thomson Reuters, The Woodbridge Company Ltd.
- James C. Smith, Thomson Reuters
- Sheila Bair, Washington College
- David W. Binet, Thomson Reuters, The Woodbridge Company Ltd.
- Ed Clark, TD Bank Group
- Michael E. Daniels, IBM
- P. Thomas Jenkins, Opentext Corporation
- Vance K. Opperman, Key Investment, Inc.
- Kristin Peck, Zoetis
- Barry Salzberg, Deloitte Touche Tohmatsu Inc.
- Peter J. Thomson, The Woodbridge Company Ltd.
- Wulf von Schimmelmann, Deutsche Post
Thomson Reuters was the result of a merger between Canadian media company Thompson and the British news agency Reuters, which in turn was founded in 1851.
The cornerstone of Thomson on the other hand was laid more than 80 years before Reuters came into existence: In 1934, the Canadian Roy Thomson (1894-1976) bought his first newspaper, the ‘Timmins Press’ based in Ontario, his first step in establishing Canada’s biggest newspaper empire. In the 1950ies, Thomson began searching for potential activities abroad and made a find in Great Britain. He acquired the newspaper publishers Kemsley Group in 1959, including the influential regional newspaper ‘The Scotsman’. The crown jewel of the British press was acquired in 1967, London daily newspaper: ‘The Times’. The 1970s were shaped by a venture into the oil business in the North Sea (among others). It was during this time that founder’s son Kenneth (1923-2006) took over the company’s leadership. The 1980ies witnessed Thomson turning his attention towards the information business and he kept extending these particular activities through continuous additional purchases. The acquisition of service providers focusing on specialised information in the fields of law, health, science and finance as well as database operators successively led to the formation of a new company profile. The involvement in British newspapers ended in 1995, the ‘Times’ had already been sold to News International Ltd. in 1981. By 2007, Thomson finally made a friendly takeover offer for news agency Reuters, amounting to 17,6 Billion US-Dollar (approx. 13 Billion Euro).
Fusion partner Reuters is one of the most important news agencies in the world and looks back onto a long tradition. However, by 2007, only ten percent of its turnover had been generated by traditional news. Clients from the financial sectors, who were being supplied with financial data via specialised terminals, constituted the majority of the business. The German Paul Julius Reuter (1816-1899) took advantage of a gap in the telegraphy network between Aachen and Brussels in the mid 19th century and started sending information using carrier pigeons. When the telegraphy line had been completed, Reuter set up office in London in 1851, from where he ran his information trade via the Calais-Dover underwater cable. The company expanded over the course of the next decades and supplied British newspapers with news. The proprietors set up the Reuters-Trust in 1941 as a reaction to the British government censoring the Reuters reports during the two world wars. The trust sought to ensure the agency’s independence. The policies of the trust prohibited shares of more than 15 percent.
Furthermore, the Reuters Founders Share Company Ltd. had been holding a ‘Golden Stock’ since going public in 1984, which was linked with a veto right concerning decisions made at the general meeting(s). In the past, Reuters had also been able to extend its position on the international news market by means of an early adoption policy regarding new technologies.
From 1923 onwards, the news was transmitted through radio, per satellite from 1961 and via computer connection from 1971. Reuters expanded heavily in the 1990ies – a strategy that would cause problems after the end of the ‘dot.com-boom’. The range of services had become too confusing and clients were cancelling the allegedly inflexible Reuters terminals by the dozen. This led to Tom Glocer taking over the directorship from Peter Job 2001. In the years to follow, he managed to reposition the company and guide it back into the success lane, including some drastic saving measures.
In April 2008, the merger between the Thomson Corporation and Reuters, which would be the birth hour of the largest information service provider in the world, became reality. According to analysts, both companies play into each other’s hands. In the course of the merger, the Thomson family ended up owning 53 % of the shares through their Woodbridge investment division. Therefore, the basic Reuters policies were in need of an adjustment. In return for this policy change, the underlying principles of independence as stated by the Reuters Trusts (As of today: Thomson Reuters Trust) are now applied to the whole company.
The Reuters Founders Share Company became the Thomson Reuters Founders Share Company, making sure that the principles constituting the company’s independence are adhered to. The compliance of the trust principles – Impartiality, integrity, independence and freedom – is observed by the directors’ committee, which hosts between 14 and 18 dignitaries.
Tom Glocer, born in 1959, was the first American to take over the rudder at Reuters and stood at the top of the newly originated Thomson Reuters Company, following the fusion in 2007. When Glocer took over the leadership in 2001, the company did generate profits indeed but was losing market shares to competitor Bloomberg. In addition, the Reuters brand was not well known in the USA and for the first time since going public in 1984, the company slid into the red numbers due to the New-Economy-Crash. In the following years, Tom Glocer’s profile would become that of a tough renovator. The company leaders announced the cut of 1.600 jobs in order to save half a billion in Euro within two years. Furthermore, the terminals that Reuters used to rent out to clients would be expanded by Internet based services, as exemplified by Bloomberg. At this point, Glocer chose a different path than the competitor from New York: The unprofitable TV station Reuters Financial TV went off the air in 2002. Further management decisions would marginalise the traditional business field of agency-based journalism even more; yet, it remained important for the reputation. “The traditional media business is the historic heart of the company’, said Glocer. He emphasises creditability and supports Reuters’ market position. Glocer faced resistance within the ranks of staff when he announced to relocate the client-friendly processing of collected financial data to Bangalore in India for cost-efficiency reasons. Tom Glocer is not the first non-journalist to grace the Reuters’ executive chair.
His counterpart of the merger, Thomson CEO Harrington has been at Thomson since 1982 and became the CEO in 1997, a time when the Internet was yet to turn the business upside down. At its core, the company revolved around the involvement in newspapers but it was subject to radical configurative changes by Harrington: Away from print and to electronic information services and database-systems. His vision was a slim and focussed company. Branches were cast off when they would not fit the concept any longer, such as the tourism branch Thomson Travel in 1998. Within six years, Harrington sold more than 60 subsidiary companies and 130 newspapers. Due to the fact that most subsidiaries had been highly profitable during the peak of the new economy boom, the company’s liquidity after the sales was correspondingly high. The first measure was to use the revenue to acquire more than 200 special information companies from the fields of law, taxes and accounting, education, finance, science and health. Subsequently, a take-over offer for Reuters was put on the table.
In 2008 Harrington went on to become the head of the Reuters Foundation, CEO Tom Glocer was outspokenly confident even before the merger’s final approval in 2008: Under no circumstances would the new company suffer the same fate as many other mergers such as AOL-Time Warner or CBS-Viacom. “I do not see the whole thing as a kind of mega-media merger at all. It is a combination of two companies that are active within the same business fields anyway.”
When it came to competition law, the merger has not gone undisputed: Together with Bloomberg, the new concern would control two thirds of the market – the creation of a duopoly. Despite ‘substantial concerns’, the review that was being conducted by the relevant anti-thrust authority, the EU commission, since 2007 turned out to be surprisingly mild. The European commission, the responsible US ministry of justice as well as the Canadian Competition Bureau issued a provisional approval, albeit linked with conditions, as early as February 2008. According to prevalent opinions in the business, both companies got away rather favourably: The guardians of the competition law merely focussed on four relatively small sectors in which Reuters and Thomson were identical already, according to the New York Times.
Substantial concessions on the part of the concern had been the sale of various databases to competitors. Thomson committed to sell a copy of its Thomson Fundamentals (Worldscope) database. Reuters on the other hand had to offer copies of the databases Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) on the market respectively. Losses that were rather easily coped with, considering that the combined revenue of the four divisions was just 25 Million US-Dollar. CEO Glocer was appropriately well spirited in his statement: “I am very happy with the outcome.”
When the intention to merge was announced, the possible savings due to synergy effects was estimated at 500 Million US-Dollar by the end of 2011. The prognosis has been increased to an ambitious 750 Million US-Dollar since. Long before the actual Merger, Glocer declared that job cuts would be inevitable, triggering threats of possible strike action(s) by British Journalist Union NUJ. However, due to the fact that yearly fluctuation would affect approximately ten percent of the staff anyway, Glocer expected to cut down “the majority” of the 5000 jobs at Thomson Reuters “in a natural manner”. Initially, word had it that Reuters News and the agency services would be unaffected by the job cuts, because the list was comprised primarily of mirror structures within the finance information sectors. Yet, approximately 140 journalists had to pack their bags in between May 2008 and the end of the year nonetheless. A first measure sought to cut 650 jobs within the whole company, including 250 notices of termination. According to Reuters News CEO David Schlesinger, the targeted number of employees of the new Reuters News department was 2500. “More than half of the job cuts will have to take place in Europe, where the former services of Reuters and Thomson overlap the most.” wrote Schlesinger to his staff, according to The Guardian.
In February 2009, Reuters introduced a new management structure for the multimedia division: As a result, Editor-in-Chief Chris Cramer heads all five divisions: TV, Photography, Reuters Financial Video Service, Online and News agency. Senior editors represent each of the five divisions.
The business fields are allocated to two superordinated divisions: ‘Professional’ and ‘Markets’. In terms of organisation, these are in turn separated into six branches: ‘Sales & Trading’, ‘Enterprise’, ‘Legal’, ‘Healthcare & Science’, ‘Investment & Advisory’, ‘Tax & Accounting’ as well as ‘Media’. The media resort extended the product palette of the five Thomson service range after the merger. As such, the fields are:
Products from the field of finance include information services for investors, offering economy and finance data processing on a global scale.
The law division offers a large range of services such as databases and software solutions for the legal sector, such as solicitors’ offices, law departments in companies as well as for administration, special interest libraries and institutes.
The ‘healthcare’ field offers databases and software for hospitals, clinic administrations as well as the pharmacy and biotechnology industry.
The products from the ‘Science’ divisions cater towards public and private research institutes with reports about current developments in the respective scientific field, such as magazine databases.
Tax and Accounting
The ‘Tax & Accounting’ division offers software solutions and information services for accounting agencies, solicitors’ offices, banks and administration.
The ‘Media’ division is home to the Reuters news agency. The Reuters services include news ticker, videos, pictures, and graphics as well as specialised online media services. The financial news division forms a branch of its own.