Thomson's Muni Unit Loses Chief, As Muni Price Redistribution Talks With Telerate Proceed

A reorganization of Thomson's municipal information services units has disbanded its Securities Information Services (SIS) unit, leaving its president Nancy Martin out of a job. The shuffle comes as Thomson is negotiating with Dow Jones/Telerate to distribute its municipal bond offerings over that vendor's network -- even as Thomson is at work developing its own unified municipal bond data platform.

Thomson's talks with Telerate coincided with the expiration at the end of September of a 15-year exclusive deal between Telerate and McGraw-Hill to distribute the S&P Blue List's bond offerings via Telerate.

The deal between McGraw-Hill and Telerate was in effect during Martin's long tenure as head of the S&P Blue List and other muni products, which she left to join Thomson in early 1990. Consequently, Martin herself was a potentially valuable source of information to Thomson in negotiations with Telerate. Martin couldn't be reached for comment.

But the latest reorganization of Thomson's muni information services units will put responsibility for technology and sales back into the hands of the two general managers that now oversee the pricing and other muni information products. Previously, the two general managers reported to Martin as head of the SIS group that they comprised.

Muller Data is headed by general manager, Neil Edelstein, while Debra Heffernan is general manager of Municipal Information Services. Heffernan's group comprises the Munifacts electronic data delivery platform.

The reorganization at Thomson leaves Edelstein and Heffernan answering to Mike Danziger, Martin's former boss and chairman of the Thomson Financial Services Database Group. This wider group includes Muller Data and the Municipal Information Services business. Danziger assumed control of the Database Group last April.

In addition, the reorganization will eliminate the position of Jose Pecache, who as technical director for SIS oversees development of the unified Windows-based platform. Pecache will remain at Thomson for 90 days, by which time the platform should be well on its way to a launch.

In the meantime, sources say McGraw-Hill and Telerate are close to a new, nonexclusive agreement to continue making the S&P Blue List available through Telerate. Under the new agreement, S&P loses its guarantee that Telerate won't add additional -- and competing -- sources of muni prices. As before, however, S&P will retain the rights to deliver its Blue List via other vendors' networks.

Indeed, talks between Thomson and Telerate -- increasingly chummy of late -- are proceeding apace, according to sources. Particularly, Munifacts Offerings, Thomson's S&P Blue List equivalent, has been a topic of discussion. It's unclear what impact, if any, Martin's ouster will have on Thomson's talks with Telerate.

But the deals have been complicated anyway by the ubiquitous Telerate-Cantor Fitzgerald L.P. relationship. Since before Telerate negotiated its deal with McGraw-Hill, an agreement between Telerate and Cantor Fitzgerald gave Cantor the right to be Telerate's sole supplier of municipal bond price data.

But Cantor never exercised the right, and Telerate subsequently turned to S&P Blue List, which broadcasts attributed bids- and offerings-wanted from muni bond dealers as advertisements of interest. The service allows dealers to circumvent brokers and deal directly with each other and with other investors.

The expiration of S&P's deal with Telerate left Cantor an opportunity to demand its right to advertise its prices exclusively through Telerate. But Cantor's municipal bond brokerage business sustained damage when its entire Los Angeles- based muni desk closed several weeks ago, as all of its brokers left "in a pack" to join a rival broker, according to a Cantor source.

Nevertheless, sources say Cantor has continued to grouse, adding the muni agreements to the list of putative wrongs perpetrated on it by Telerate. Cantor's stance on munis, however, could be mere posturing as it attempts to gain concessions from Telerate in other data fields, such as foreign exchange (IMD, Oct. 26).

Even as Thomson continues to explore ways of using Telerate as a delivery channel for its muni data, the vendor is also busy at work on a Microsoft Corp. Windows-based platform to unify its various muni bond-oriented services.

Earlier this year, Thomson earmarked a multimillion-dollar development budget to complete and install its Munifacts- successor delivery platform, which is scheduled to enter beta tests in January.

An internal debate at Thomson has raised the strategic question of whether making its muni prices available widely over Telerate would undermine sales of the unit's own delivery platform.

Under the most recent and visible Thomson/Telerate agreement, a joint marketing agreement covering the optional analysis services provided by Thomson's Tech Data unit left Tech Data's municipal bond analysis service conspicuously absent (IMD, Aug. 17). Sources say that Telerate's agreement with McGraw-Hill's S&P, still in effect at the time, prohibited the inclusion in the deal of muni commentary or pricing data from any non-McGraw-Hill source.

Following his involvement in the negotiations with Telerate, Tech Data's Chris Harris last month was promoted to the role of managing director from regional managing director. Previously, Keith Jarrett, head of the TFS Trading Service Group, had direct managerial responsibility for the unit.

Under the Tech Data reorganization, Cameron Lockhead was named general manager, Technical Data/IFR-Americas, moving up from the position of general manager, IFR-Americas. Jock Ferguson was also raised to the job of managing director for Tech Data, Europe/Gulf, and will have authority to oversee the relationship with Telerate globally.