The Economist Group is a UK-based media company that specializes in providing high-quality content and analysis on a range of current affairs topics including politics, economics, business and finance. The company’s flagship publication, The Economist, is published weekly and known for its insightful articles and in-depth coverage of global events. The publication is widely respected by business leaders, policymakers, and academics around the world. On any given issue, readers can learn about everything from recent election results in Western Europe to fiscal policy in Southeast Asia. So much is packed into each issue that even the most loyal subscriber would be challenged to read each issue from front to back. The magazine is also known for its distinctive writing style, so much so that The Economist has even published its own style guide, which contains useful tidbits for writers such as ‘Do not be hectoring or arrogant’ and ‘Do your best to be lucid’.
While The Economist Group is private and its shares are not available for the general public to buy (unlike other media companies like The New York Times and News Corp which are publicly traded), the company does release an annual report which contains its financial records. In 2022, the company had £346 million in revenue (up from £310 million in 2021), an operating profit of £46 million (up from £42 million in 2021), and a profit after tax of £36 million (up from £17 million in 2021). But those figures only tell a part of the story. Do they have other sources of revenue besides magazine subscriptions? How has the business performed over time? And how does it compare with other media companies? This post will cover:
- The different business units of The Economist Group
- How the company makes money
- How their 2022 financials compare with previous years
The four business units of The Economist Group
The most well known unit of The Economist Group is the company’s flagship publication, The Economist. This consists of the paper magazine, as well as the website and mobile app. In addition, The Economist also generates content via podcasts, newsletters and videos. The Economist has 1.185 million subscribers, which is about the same as 2021 (1.182 million subscribers). A majority of subscribers get The Economist in digital-only format now (52%), a notable improvement from 2020, when only 35% did. And that trend will likely increase, as 66% of new subscribers in 2022 were digital-only. That’s up from 54% in 2021 and 47% in 2020.
The second business united is Economist Education, which provides online executive-education courses that are designed and written by the group’s journalists and editors. These courses cover a diverse range of subjects such as fintech, professional communication, and geopolitics. The courses aim to deliver actionable insights, practical skills, and networking opportunities to help participants advance in their careers and shape the future of their organizations. Economist Education is also committed to adapting its courses to global events in real-time. For example, when Russia invaded Ukraine, the curriculum for the geopolitics course was quickly retooled to expand analysis of the clash between democracies and autocracies. Economist Education received high marks from students in its first year, with over 90% of students completing their courses and 89% expressing high satisfaction with the experience. The unit is expanding the number of courses offered and is looking to sell directly to companies seeking to develop the skills and knowledge of their key talent.
The third business unit is Economist Impact, which was launched in September 2021 and consists of an “unmatched portfolio of capabilities including policy research and insights, multimedia content, global events and advertising.” The unit works with a wide range of organizations, including corporations, nonprofits, and governments, to develop content, research and events. The events that Economist Impact organized were a highlight for the unit in 2022. The unit organized 222 events in 2022 (an increase of 30% from the previous year), had 497 sponsorships (up 36% from the previous year), and had 78,000 attendees (up 11% from the previous year).
The fourth unit is Economist Intelligence, which is the research and analysis division of the Economist Group. The unit analyzes factors such as political stability, economic growth prospects, and social conditions to provide a comprehensive view of the risks and opportunities in over 200 markets. It provides data, forecasts, and analysis on a range of issues, including macroeconomic trends, industry analysis, and country-specific research. Clients include governments, multinational corporations, and financial institutions. Economist Intelligence also offers custom research projects that are tailored to the specific needs of clients. These projects can include surveys, data analysis, and in-depth research on specific topics or industries so clients can make informed decisions in a rapidly changing business environment.
How the company makes money
At a high level, the company’s annual report breaks down their revenue sources into two categories: 1) subscriptions and 2) advertising, research and other sources. Subscriptions generated £211.7 million in revenue while advertising, research and other sources generated £134.6 million.
The company also provides revenue figures by business unit. In 2022, The Economist and Economist Education generated £194.3 million in revenue. Economist Impact generated £106.5 million and Economist Intelligence made £45.5 million.
The key takeaway here is that the company is not overly dependent on one revenue source or business unit. But how does the company perform when compared with others in the media industry? One way to compare The Economist Group with its peers is by measuring how much revenue per employee each company generates. Revenue per employee is a financial metric that measures the amount of revenue a company generates for each of its employees, and it’s an important metric because it provides insight into a company’s efficiency and productivity in utilizing its workforce to generate revenue. The formula is simple: divide the company’s revenue (in this case the 2022 annual revenue) by the number of employees a company has. So how does The Economist Group stack up against other media companies? Let’s review:
- The Economist Group generated $418.59 million in revenue (that’s the conversion of the group’s £346 million in revenue to USD at the end of 2022) and ended the year with 1,578 employees. That comes out to $265,266 in revenue per employee.
- The New York Times had $2.28 billion in revenue in 2022 with 5,800 employees. That comes out to $393,103 in revenue per employee.
- News Corp had $10.39 billion in revenue in 2022 with 25,500 employees. That comes out to $407,450 in revenue per employee.
- Nerdwallet had $538.90 million in revenue in 2022 with 770 employees. That comes out to $699,870 in revenue per employee.
Using this metric, The Economist Group lags behind others in the media industry.
How did 2022 compare with previous years?
Here are the key metrics for The Economist Group during the last five years:
| Year | Total Revenue (in million £) | Operating Profit (in million £) | Profit after taxation (in million £) | Indicative Share Value | Dividend Yield |
| 2018 | 367 | 47 | 35 | £28.50 | 5.8% |
| 2019 | 333 | 31 | 68 | £25.50 | 4.7% |
| 2020 | 326 | 31 | 21 | £23.00 | 1.7% |
| 2021 | 310 | 42 | 17 | £25.00 | 4.0% |
| 2022 | 346 | 46 | 36 | £30.00 | 4.0% |
In summary, the company has had volatile revenues and profitability the last five years. But during that period the company has provided shareholders a relatively stable dividend yield (however as mentioned earlier the company is not publicly traded at this time). Like many traditional media companies, The Economist Group is facing challenges from digital media companies that offer similar content at lower prices (or for free). But with a diverse set of products and revenue streams, the company will continue to be a leading media brand in current affairs.