Bloomberg LP’s Fate Lies in Hands of Democratic Voters

The news that Michael Bloomberg, founder of data giant Bloomberg LP, was considering—and since formally confirmed—a run to be the 2020 Democratic presidential nominee has prompted nervous speculation within the vendor that the company may be for sale, though officials deny the suggestion.

On Friday, November 8, the vendor’s management committee emailed its 20,000 staff confirming that Bloomberg had decided to explore a presidential run. The memo—seen in full by WatersTechnology—reassured employees that during a presidential bid, the company will remain in the safe hands of its management committee: chairman Peter Grauer, co-founder Tom Secunda, CFO Patti Roskill, global head of financial products JP Zammitt, global head of engineering Vlad Kliatchko, and CEO of Bloomberg Philanthropies Patti Harris, though some of these positions have since changed (see below).

Contrary to reports implying that the company would expand its management committee in the event of Bloomberg’s departure, the memo refers to “an expanded management committee,” which refers to the additions of Roskill, Zammitt and Kliatchko in 2018 and Harris earlier this year.

Since then, when announcing his candidacy on Saturday, November 24, Bloomberg sent an email to employees again reassuring them that the company would charge forward under the leadership of its management committee—though he also announced some changes to that committee: the company has appointed Kliatchko and Zammitt co-COOs in addition to their existing roles, while former COO Beth Mazzeo becomes chief administrative officer, a newly created position, reporting to the committee. Meanwhile, Harris has stepped aside from company duties to join Bloomberg’s campaign team.

The memos may have simply been an effort at full transparency, but may also have been designed to quell rumors that the company is preparing to be acquired.

Bloomberg has certainly spoken publicly about selling before, and also about cheating the taxman by liquidating and donating his fortune to philanthropic causes before he dies. Ultimately, this may depend on how much of his $50+ billion net worth is tied up in the company versus being immediately available to fund an election campaign.

WatersTechnology has heard that all or part of the company may be up for grabs. And though a Bloomberg spokesperson insists “The company is not for sale,” the buzz from within Bloomberg is throwing out names like Microsoft, Intercontinental Exchange, BlackRock and Berkshire Hathaway as potential suitors. Of these, Microsoft probably doesn’t have the stomach for this kind of financial markets play, or for the scale of technological transformation required to integrate Bloomberg, while ICE has just absorbed Interactive Data, and may face competition hurdles. BlackRock has its own Aladdin platform and is working with the ostensibly anti-Bloomberg Symphony, so buying Bloomberg would seem counterintuitive to that investment. Berkshire Hathaway, or another large private equity firm, might be a safe pair of hands that would keep Bloomberg intact and not break it up or involve it in unwieldy integration projects. Indeed, Grauer is familiar with private equity, having until recently held a board role at Blackstone Group—part of the consortium of investors that acquired data rival Thomson Reuters, then spun out its Financial & Risk unit as Refinitiv.

The other rumor—that Bloomberg might spin off its proprietary news division—has some heft to it, not least because it would be a conflict of interest for a presidential candidate owning a media organization that could potentially influence an election with positive stories about them (or negative stories about other candidates). Insiders pooh-pooh the idea, but acknowledge that this situation could change in the future if Bloomberg gets beyond winning the nomination and runs for president.

Lending support to this idea is the fact that Bloomberg has been adding third-party news sources to its terminal, including news from Dow Jones earlier this year. Yes, Bloomberg is always adding new sources, but Dow Jones news is a competing source from a major rival. And, says one source, “Their appetite for third-party news seems to be far greater than ever. You used to have to pay to be on Bloomberg. … Now they’re buying news.”

This could be a signal that the vendor is acquiring independent news to replace its own news services on the terminal—perhaps because it’s planning to sell that business line, or perhaps slim it down and replace in-house journalists with cheaper third-party news. If Bloomberg were to sell its news business, it could lease back the content—much as Refinitiv leases back (formerly in-house) Reuters news—which would fulfill a political need for independence, and would also deliver a guaranteed revenue stream to make the business more attractive to any buyer, since the business has always been a loss-leader to support terminal sales.

Until now, this could have all been a moot point as Bloomberg pondered whether to run. His decision to do so means for certain that he’ll no longer be involved in running the company that bears his name—at least for now, and perhaps never again, depending on the outcome of the election. But love him or hate him—and media polls so far have been underwhelming, with the public skeptical about two 70-something billionaires fighting for the presidency—you’ve got to admire Bloomberg for two things if nothing else: the man who was shown the door from Salomon Brothers at age 39 has since been wildly successful in business and politics, and relishes a challenge.

Editor’s note: this story has been updated from its original version to include the contents of the November 24 memo.