Reuters delays paywall plans after disagreement with LSE

Exchange’s Refinitiv unit says charge would breach 30-year news supply deal

The dispute has thrown into turmoil the news group’s efforts to broaden its sources of revenue. Photograph: Facundo Arrizabalaga/EPA

The dispute has thrown into turmoil the news group’s efforts to broaden its sources of revenue. Photograph: Facundo Arrizabalaga/EPA

 

Reuters News has bowed to pressure and delayed plans for a website paywall after its main customer Refinitiv, a data provider owned by the London Stock Exchange Group, complained the move would breach their news supply agreement.

The decision to postpone charging for Reuters.com, which was planned for June 1st, reflects growing tensions over how the Thomson Reuters division is delivering its 30-year deal to provide news for Refinitiv.

Earlier this month David Craig, the departing head of Refinitiv, warned Reuters the paywall was not permitted under their agreement and would cause Refinitiv “significant loss and material and irreparable harm”, according to a letter leaked to MarketWatch.

The dispute has thrown into turmoil the news group’s efforts to broaden its sources of revenue. Refinitiv makes annual payments of $325 million to Reuters, about half of the news provider’s turnover, with the remainder generated by media agency fees and events.

The disagreement is the low point of an increasingly difficult relationship with Refinitiv, which has privately raised concerns over Reuters’ output and whether it is meeting key benchmarks in its news supply deal, according to people familiar with the discussions.

Alessandra Galloni, the newly appointed Reuters editor-in-chief, confirmed the delay to staff on Thursday, without providing a new date for the introduction of the $34.99 charge for access to the website.

Thomson Reuters sold a majority stake in Refinitiv to a private equity consortium led by Blackstone in 2018. As part of that deal Refinitiv guaranteed it would pay Reuters News at least $325 million a year until 2048 for its journalism.

The agreement included non-compete clauses that restrict commercial opportunities for Reuters by preventing it from supplying news to rivals of Refinitiv. Its terms were carried over to the LSE when it completed its blockbuster $27 billion purchase of Refinitiv in July. – Copyright The Financial Times Limited 2021