LSE warns Reuters that paywall violates terms of Refinitiv deal
A rift between the London Stock Exchange Group and Reuters has opened over the media company’s plans for a new paywall, which the London Stock Exchange says is in violation of a 30-year deal in the sale of its news to data provider Refinitiv.
An LSEG LSEG,
letter to Reuters, dated May 13 and seen by MarketWatch, argues that the supplier of Announcement in April of a plan to billing for content was “not permitted” under the terms of the 2018 Refinitiv sale.
David Craig, Managing Director of Refinitiv, and Andrea Stone, Director of Client Proposal at LSEG, said in the letter to Michael Friedenberg, Managing Director of Reuters, that requiring Reuters readers to pay for content “would result in a loss. and material that is important and irreparable for Refinitiv. prejudice.”
derives about half of its revenue from Refinitiv, making the financial data firm its biggest customer. Thomson Reuters, the parent company of Reuters News, has a 15% stake in LSEG following its 2019 $ 27 billion all-share deal for Refinitiv. The LSE’s purchase of Refinitiv took two years – amid regulatory requirements and snags related to the COVID-19 pandemic.
In a joint statement to MarketWatch, spokespersons for LSEG and Thomson Reuters said they have a long-standing and valuable partnership.
“As with any trade agreement, there are ongoing and private discussions about our business approach and our products,” the statement added. “The basis of our partnership is solid and we will continue to work together to deliver to all of our customers.”
Refinitiv was part of Thomson Reuters until 2018, when a controlling stake was bought by private equity firm Blackstone Group in a deal valuing the company at around $ 20 billion. The deal included a $ 325 million per year deal for Reuters to provide its information to Refinitiv’s largest financial services clients, including JPMorgan, Wells Fargo, Bank of America and Goldman Sachs.. In 2019, LSE announced its intention to acquire Refinitiv.
The letter calls for “an early meeting to facilitate a resolution” of the matter, and adds that Refinitiv has the right to take the actions authorized under its press agreement with Reuters. A description of the agreement in a 2019 circular to LSEG shareholders states that either party “may bring an action (including a claim for specific performance or injunction) in the courts of New York” if disputes arising from the agreement cannot be resolved amicably.
In April, Reuters unveiled a redesigned website, with the aim of attracting a professional audience for its business, financial and general news, as part of a broader strategy to increase revenues for its digital news readership. . He called the change “Reuters’ biggest digital transformation in a decade.”
After registration and a free preview period, a subscription to Reuters.com will cost $ 34.99 per month, the same as Bloomberg’s digital subscription. The offer, available as monthly or annual and individual or group packages, will also include live streams of Reuters events for subscribers and a subscriber-only newsletter, the news agency said.
As part of the 2018 deal, Refinitiv agreed to pay Reuters News $ 325 million per year until 2048. The deal, valued at around $ 10 billion, included non-compete clauses that limit Reuters’ ability to work with Refinitiv’s rivals, thereby closing potential business opportunities.
“The press agreement prohibits Reuters from directly soliciting, managing cash flow, investing, or covering departments of any company to purchase general news content,” the letter said. “The statements on your website about this proposed new website make it clear that you are directly soliciting professionals in the trading and investment departments to enter into press deals.”
“The launch of the Reuters service would constitute a violation of the press agreement, in particular given your marketing materials,” he adds.
Dow Jones, the parent company of MarketWatch, competes with Reuters to provide financial information and data to clients.