Bored Of Philanthropy, Billionaire Mike Bloomberg Back As Chief At Bloomberg LP
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It was only a matter of time until he would decide to take the reins. Late on Wednesday, and less than a year after ending his third term as Mayor of New York City, billionaire Mike Bloomberg announced we would once again lead the company that bears his name. The announcement came with the departure of CEO Daniel Doctoroff, who worked as Bloomberg’s Deputy Mayor for six years before become moving on to Bloomberg LP. The former Mayor, who for years indicated he had no plans of returning to the company, faces the daunting challenge of diversifying revenue streams away from the terminal business, which generates about 80% of the company’s annual sales, as Bloomberg LP has become the dominant player in the financial data market across the globe.
Ultimately, Doctoroff couldn’t handle the billionaire’s increasing presence. While originally the former Mayor planned to spend a few hours a day at his new office in the fifth floor of their Lexington Avenue headquarters, Bloomberg began to spend more time at the company, participating in meetings about strategy and at times differing with his CEO.
“I love the company and have deep respect and affection for Mike, so leaving is not an easy decision, but it is the right one for the company, for Mike and for me at this stage of my life,” Doctoroff explained in a press release. “It is and has always been Mike’s company and given his renewed interest and energy, it only makes sense for him to retake the helm.”
Bloomberg only had praise for his former deputy, who took revenues from $5.4 billion in 2007, just before he became President, to over $9 billion this year. “This is a sad day for me and my company,” Bloomberg said, adding “I really wanted Dan to stay and continue in his leadership role. But I understand his decision. I never intended to come back to Bloomberg LP after twelve years as Mayor. However, the more time I spent reacquainting myself with the company, the more exciting and interesting I found it.”
Bloomberg LP is the global market leader in financial data, claiming to control 32% of the market. The company outstripped Thomson Reuters as number one, and under Doctoroff’s leadership has tried to expand elsewhere. While growth has been impressive, it has begun to slow as the internet and competitors eat away at its main revenue generator: the Bloomberg Terminal. Last year, company-wide revenue hit $8.3 billion, yet the 320,000 subscribers the terminal business counted on, each paying about $20,000 a year, generated approximately $6.4 billion in sales, or more than 79% of overall revenue.
Doctoroff pushed hard to diversify the company, building an important news and television unit, adding on legal, government, and alternate energy information, and creating an enterprise products and solution units. While the latter’s sales topped $1 billion, BusinessWeek is estimated by some to have losses in the tens of millions, with the TV unit potentially tripling that.
Bloomberg still derives the bulk of his net worth from his 88% stake in the company he founded back in 1981 alongside Thomas Secunda, Charles Zegar, and Duncan MacMillan. Under his stewardship, Bloomberg LP will face the challenge of a new era, where a falling number of traders can go to different and potentially cheaper sources of data and information. He will also have to figure out how to create a profitable media empire, and continue to grow their enterprise business.
In the meantime, Doctoroff can continue to be the former Mayor’s “friend, adviser, and partner,” as Bloomberg put it in the press release. He’s been offered a seat in the board of the Bloomberg Philanthropies. A seat he’ll probably accept.
