Pearson picks education as sole focus, sells Financial Times stake
Depending on your outlook of Pearson, described as “the world’s largest education company” by the Washington Post, the latest news about the company may serve as good or bad.
According to the Post, Pearson is making a move to focus solely on education.
“The company is selling its stake in the Financial Times to Nikkei Inc., a leading Japanese media organization, for $1.3 billion, a move that Pearson chief executive John Fallon said was precipitated by the changing journalism business model and by Pearson’s desire to focus entirely on education, according to Financial Times.“
Because Moody’s downgraded Pearson’s credit outlook to negative due to instability in the higher education arena, this move would give Pearson “nearly $1.5 billion in net proceeds;” something that may improve its standing with Moody’s
The article further states that Pearson has lost a few “big testing contracts” in New York, Texas, and Florida. But the news isn’t all bad for Pearson. The Post reports that the education giant is the primary vendor for the Partnership for the Assessment of Readiness for College and Careers. It is also one of only two multi-state consortia charged with designing new Common Core specific exams — a task that comes with nearly $360 million in federal funds.
Many view Pearson as a monopoly because of its size and number of contracts it holds. But because of the recent losses, and news that it wants to reaffirm its standing within the education community, this may either signal the beginning of the end for Pearson or start of something greater.