Reuters has postponed plans to introduce a new paywall on its website, after complaints from the London Stock Exchange Group that the move would place the media company in breach of a 30-year agreement in the sale of its news to data provider Refinitiv.
Reuters had intended to start charging for its news from June, as part of a wider strategy to boost revenue from its digital news readership.
A spokesperson for Reuters said the company was “still working through our plans for the relaunch of Reuters.com as a subscription service”.
“We are in ongoing and private discussions with LSEG Refinitiv about our business approach and products, and how we can enhance our offer to all customers,” the spokesperson added. “The new website — which has received a tremendous initial reaction — will remain in beta while we finalize our plans. Customers can continue to enjoy our world-class news for free at Reuters.com.”
A spokesperson for the LSEG declined to comment.
Financial News broke the news on 20 May that the plans had provoked a dispute between the London Stock Exchange Group and Reuters.
An LSEG letter to Reuters, dated 13 May and seen by Financial News, MarketWatch and Barron’s, argued that the news provider’s April announcement of a plan to charge for content was “not permitted” under the terms of the 2018 Refinitiv sale.
Postponing the launch of the paywall raises questions about the media company’s plans to source new revenue through its website, and also its relationship with Refinitiv.
Reuters derives around half of its revenue from Refinitiv, making the financial data firm its biggest client. Thomson Reuters, the parent company of Reuters News, holds a 15% stake in LSEG following its $27bn all-stock deal in 2019 for Refinitiv. The LSE’s purchase of Refinitiv took two years to complete — amid regulatory requirements and pandemic-driven snags.
In a joint statement issued to FN, MarketWatch and Barron’s in advance of its 20 May article, spokespeople for LSEG and Thomson Reuters said they had a long standing and valued partnership.
Refinitiv was part of Thomson Reuters until 2018 when a majority stake was purchased by private equity firm Blackstone Group in a deal valuing the business at about $20 billion. That deal included a $325m-a-year agreement for Reuters to provide its news with Refinitiv’s largest financial services customers, including JPMorgan, Wells Fargo, Bank of America and Goldman Sachs. In 2019, LSE announced its intention to buy Refinitiv.
The letter, from David Craig, then chief executive of Refinitiv, and Andrea Stone, LSEG’s chief customer proposition officer, requested “a prompt meeting to facilitate a resolution” to the matter, and adds that Refinitiv has the right to take actions permitted under the terms of its news agreement with Reuters. A description of the agreement in a 2019 circular to LSEG shareholders states that either party “can bring an action (including a claim for specific performance or injunctive relief) in the New York courts” if any disputes arising from the agreement cannot be resolved amicably.
Craig was reported on 26 May to be stepping away from his role at the London Stock Exchange Group at the end of this year. He will be replaced by Stone as of 1 July, and remain with the firm as an adviser until the end of the year.
Reuters had unveiled a redesigned website in April, in a bid to attract a professional audience for its business, financial and general news.
After registration and a free preview period, a subscription to Reuters.com would have cost $34.99 a month, the same as Bloomberg’s digital subscription.
As part of the 2018 deal, Refinitiv agreed to pay Reuters News $325m a year until 2048. The agreement, which is valued at around $10bn, included non-compete clauses that limit Reuters’ ability to work with Refinitiv’s rivals, closing off potential commercial opportunities.
“The news agreement prohibits Reuters from directly soliciting, treasury, investing or hedging departments of any company to purchase General News Content,” the letter stated. “The statements on your website about this new proposed website make it clear that you are directly soliciting professionals in trading and investing departments to enter into news agreements.”
Dow Jones, the parent company of Financial News, MarketWatch and Barron’s, competes with Reuters in providing financial news and data to clients.
To contact the author of this story with feedback or news, email Lucy McNulty