Signs of Pearson sale of FTE seen last summer.

An indicator that Pearson planned to shed its subsidiary, the Financial Times Energy operation (NL/NL 9/15/00) came last this past summer with the firing of key personnel at its Arlington, Virginia, location and the shifting of many functions to Boulder, Colorado.

FTE's Arlington operation was the heart of its United States energy newsletter business and included the publications and conference business of Pasha Publications, which it purchased in 1998 for a reported $17.8 million.

Until this summer Pearson had been expanding FTE, which billed itself as the "world's most comprehensive provider of global energy news, data, information, and analysis."

It was helped in its marketing efforts in the U.S. by its linkage with the prestigious London-based newspaper, the Financial Times, also part of the Pearson conglomerate, and its comprehensive coverage of overseas energy matters out of its London office.

A major prize for the purchaser of FTE will be its highly regarded newsletter operation, which includes Gas Daily, Coal Outlook, and Megawatt Daily, and its conference business.

A subscriber to a number of FTE's London-based newsletters expressed concern that the prized editorial quality of its U.K.-based publications--such as Asia Gas Report, Gas Daily Europe, Power in East Europe and Power in Asia--may diminish with Pearson out of the picture.

Besides its newsletter operation, FTE focuses on the retail side of the energy field through E SOURCE Inc., which provides independent analysis of retail energy markets, services and technologies. FTE purchased E SOURCE a little more than a year ago from the Rocky Mountain Institute for $18 million.

Earlier it had purchased Resources Data International to give it entry into the supply-side of the energy field with data and analytical tools such as POWERdat, GASdat, and POWERmap.

The FTE operation is now headquarterd in Boulder and is run by Wayne Greenberg who was president of E SOURCE before its sale. Prior to joining E SOURCE Greenberg was president of Shepard's/Mc Graw-Hill, the legal publishing arm of McGraw-Hill.

Apparently it was Pearson's attempt to prop up its stock price on the London Exchange that led to its decision to sell FTE and concentrate on other core businesses in its vast publishing and communications operation.

It is involved in the education market through Pearson Education and in book publishing through Penguin Putman, and last month it entered into a joint venture with Random House and McGraw-Hill to invest in ebrary, an online research company.

For the past decade, Pearson has owned newsletter properties but has been quick to sell them off if they failed to generate the profit margins of 18 to 20 percent which management expects.

This is what happened to Capitol Publications. "Cap Pubs" was started more than 30 years ago by Ken Callaway with one newsletter which focused on the government's "anti-poverty program."

By the time Cap Pubs was sold to a Pearson subsidiary, it had grown into one of the biggest and most successful newsletter publishers in the Washington area. The colorful "Ken" took on folk hero status when he sold his firm in 1984 to be the first independent newsletter publisher to cash in and become a millionaire.

When Pearson decided to sell off Capitol Publications in 1997, the company had grown to more than 50 titles in several divisions.

Cap Pubs newsletters on education, grants and funding, and healthcare, along with two high-priced financial publications, were sold to Aspen Publishing, a subsidiary of the media giant Wolters Kluwer.

The final chapter in the history of Capitol Publications came last summer when Pearson sold Communication Briefings and two other newsletters to the Wicks Group for a reported $10 to $11 million.

Ironically, at the same time that the Pearson subsidiary was selling off Cap Pubs properties it was purchasing Tod Sedwick's company, Pasha Publications, and its energy-related newsletters and conferences for a reported $17.8 million to beef up FTE.

After the sale to Pearson, Sedgwick became managing director of the FTE newsletter operation but left after about a year when Cindy Carter took over as publisher of the U.S.-based FTE newsletters. Carter had previously been a publisher at Capitol Publications and was familiar with the way that Pearson operated.

Carter was dismissed suddenly, along with most of the other non-editorial personnel in the Arlington office, who received Federal Express notices and papers to sign in order to receive their severance benefits.