So, Marjorie Scardino is leaving Pearson after 15 years in charge. A paean of praise has been heard since the announcement – much of it well-deserved. After all, she has re-engineered the business away from an odd hodgepodge of diversified holdings (James Ashton reminds us that Madame Tussaud’s and Alton Towers were both Pearson properties when she joined) to a more coherent – and sustainable –proposition. But one stat struck me as worthy of closer examination.
In Nils Pratley’s report, it was mentioned that Pearson’s share price was 88% higher now than when she joined, on 1st January 1997. Now, I know that there have been some recessions and a dotcom crash in the period, but I was struck that 88% over fifteen years (an average of 5.87% a year) is good – but hardly spectacular.
So I checked. When the then un-Damed Marjorie took on Pearson, the share price was 678p. It closed today at 1230p. That’s an increase of 82%, by my reckoning – but pretty close, Nils.
Then I wondered how my money might have fared if I had invested in some rivals. Viewing Pearson as a publisher of educational, business information, and news products, I compared it to some competitors. For convenience, I have associated these with one or other of Pearson’s activities – though in truth, most of the companies mentioned here cross several media boundaries. And the following comparisons come with a large geek warning.
In the business publishing space, Reed Elsevier, Pearson’s neighbours on the Strand, have made some progress: from 551p in 1997 to, er, 602.5p today – about 9% in 15 years. But Thomson Reuters has fared even worse, despite betting the house on the merger of the two massive media giants. In 1997, Thomson was trading at C$28.75; it is virtually at par on C$28.43 fifteen years later.
Among UK newspaper publishers, News Corp has done best: from A$13.28 to A$24.40 – slightly pipping Pearson to an 84% increase. DMGT – publisher of the Daily Mail – has increased from 419p to 502.50p over the same period. A 20% increase, though you’d have been better off putting your money in its separately quoted subsidiary Euromoney; it would have yielded a 121% pay off (from 355p to 785p). Trinity Mirror, of course, has tanked: from 488p to 67.75p – a drop of over 86%! – since then.
Many of Pearson’s rivals in the educational space are privately owned – or a subsidiary of one of the above businesses. But one has yet to be mentioned: with a market cap of $15bn, it is about the same size as Pearson, and works in many of the same areas – education and business information. But if you had invested $14 at the beginning of 1997, you would be holding $45 today; a 221% increase on your original investment.
Well done, then, Marjorie Scardino. You have safeguarded quite a few media jobs. But step forward Harold McGraw of the McGraw-Hill Companies to claim top spot in our highly unscientific sweepstake of publishing CEOs.