As the US wages trade war with China, the media company of presidential candidate Michael Bloomberg is making most of its conference revenues from a Davos-style event in Beijing.
Bloomberg media chief Justin Smith told the Financial Times that live events now make up nearly 15 per cent of all revenues for the news division that sits within the billionaire’s financial data company.
This has grown from less than 1 per cent in 2014, thanks largely to the success of one event: the New Economy Forum. Mr Bloomberg launched the conference last year, aimed at connecting global business leaders with the Chinese elite.
Only in its second year, the NEF already makes up about 65 per cent of all live events revenue for Bloomberg Media, according to a spokesperson. Based on a forecast by consultancy Burton-Taylor, which expects Bloomberg Media’s total revenues to reach $310m this year, that could equate to about $30m for the NEF alone. Bloomberg, which is privately held, declined to comment on revenue numbers.
As he runs for president, Mr Bloomberg’s attitude towards China has come under scrutiny in a political climate in which Donald Trump, US president, has taken on China as a strategic rival.
Mr Bloomberg recently expressed support for Beijing in an interview with PBS, arguing that Xi Jinping, China’s president, is “not a dictator” and defending its climate change policies.
The former mayor of New York this year told the Financial Times that the NEF would make a profit for his company.
“We do make a little bit of money out of it. It certainly pays for itself,” he said, adding that “the biggest benefit is you build a better relationship with your customers”, as Bloomberg’s terminals business in China is “growing very rapidly”.
Mr Bloomberg himself pulled out of the Beijing conference last month as he announced a bid for US president and vowed to step away from the operations of the company, of which he owns nearly 90 per cent.
The trade war between the US and China forced the inaugural event to relocate to Singapore in 2018, but it moved to Beijing this year.
Mr Bloomberg told the FT that Bloomberg is the news service that China “respects the most because they think we’re straight up . . . we’re a professional product; it isn’t the man in the street who reads our stuff”.
“The Chinese, if they’re trying to control what their people see, they don’t worry about us,” he said.
Events have become a high-growth business for news providers. “The one part of the media business that can’t really be disrupted by digital technology is the face to face interaction,” said Mr Smith.
The World Economic Forum, which hosts the annual Davos summit, this year made SFr345m ($352m), according to its annual report. The group said 13 per cent of total revenues came from Davos, which would equate to $46m. But the Davos meeting in the Swiss mountains attracts about 3,000 people each year, compared to only 400 for the NEF.
Mr Bloomberg enlisted two long-term China watchers — former US secretary of state Henry Kissinger and ex-US Treasury secretary Hank Paulson, to design the NEF. It is co-chaired by Zeng Peiyan, a former vice-premier of the Chinese government’s State Council.
Mr Smith said the vast majority of revenue from the NEF came from sponsorships, not ticket sales.
Bloomberg LP makes most of its money selling data terminals to financial customers. Its media group has spent the past two years searching for lines of business that Mr Smith called “invention-led growth” that would offer respite from the more challenging markets of television, print and radio.
“We made the commitment to ourselves that we would get into new businesses that were not facing the same media headwinds,” said Mr Smith. “Businesses that actually had media tailwinds.”
Live events is one such revenue stream. Another is consumer subscriptions, which have become the driving force of growth for media companies ranging from the New York Times to Netflix.
Bloomberg declined to disclose how many subscriptions it has sold for its news website, which costs more than $400 a year. However, Mr Smith claimed that subscription sales have grown by 79 per cent from a year ago.
Mr Bloomberg’s bid for the White House has raised questions about the future of his company and drawn attention to Bloomberg’s news coverage of its owner.
Mr Bloomberg said earlier this year that he would consider selling the multibillion-dollar company he founded in 1981 if he were to win the election.
Since then, Bloomberg has said it is not for sale, and people familiar with the matter have said it would probably be put into a blind trust in the event of Mr Bloomberg being elected president.
“A number of us are at the company, running his company,” said Mr Smith. “It’s a pretty full-time job running for president. There’s not a lot of time on his schedule these days.”
Additional reporting by Andrew Edgecliffe-Johnson