Bloomberg Buys BNA for $990 million

With Bloomberg’s announcement today that it intends to purchase BNA for the staggering price of $990 million, the Washington media war has entered a new phase, one in which the likelihood that all the major Beltway-journalism players will survive is slim.

The big lesson here: If any single media company should be most concerned, it’s The Economist Group, the global news titan headquartered in London that owns Washington-based CQ Roll Call. Bloomberg’s acquisition of BNA is as clear a signal to date that it intends to dominate the market for high-end, subscription-based journalism on the nitty gritty of Washington. The Economist Group wants to own that space, too, which is why two years ago it bought Congressional Quarterly and merged it with Roll Call, which it already owned. BNA was also a mainstay in this field, and with it now in Bloomberg’s hands, the conditions are set for a tough, costly battle.

The numbers here are as telling as they are jaw-dropping. The Economist Group reportedly paid $100 million for CQ. Bloomberg is paying more than nine times that for BNA. Very few companies have pockets deep enough to make such a deal. A number of veteran journalists are speculating this afternoon that Bloomberg overpaid for BNA. If so, perhaps that was a deliberate strategy. It’s tempting to view Bloomberg’s acquisition largely as a signal to its competitors: We can beat you by outspending you.

One media owner who I suspect isn’t fretting about today’s events, at least in the short term, is David Bradley, whose National Journal Group has long been CQ’s chief rival in policy-focused journalism. Bradley, who, full disclosure, was my employer for ten years, decided in 2009 not to make a bid for CQ. Why? Buying it would put National Journal in the data-driven journalism segment, which wasn’t and still isn’t its sweet spot. CQ specialized in rich reporting based on a suite of legislative databases it compiled. Bradley knew that if he bought CQ, he’d be in competition with Bloomberg—the biggest data company of them all, which at the time had its sights set on Washington. Bradley preemptively withdrew from a war that’s in full scale now. (Bloomberg eventually launched its own Washington-centric publication, Bloomberg Government, which we explored in detail earlier this year.)

Politico, another big player in the media scene, can probably breathe easily for now. Last year, it launched a premium-subscription service, Politico Pro, but the company’s core brand—and its strength—is still in breaking news and analysis supported by advertising. And there’s still a rich segment of the Washington media business occupied by newsletter services, trade publications, and Web-based products that, for the moment, the larger companies view more as a talent pool from which to poach than a rival to vanquish.

But looking ahead a year or so, it seems unlikely there won’t be another big casualty. There is simply too much money being thrown around for every company to survive. Bloomberg and The Economist Group/CQ Roll Call are the superpowers now. The rest of the field has at least two options: Spend heavily to fortify and defend their own territory, or sell.

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Shane Harris