The Fitch bond rating agency, like the better-known Morningstar, rates companies for investors, looking at the income potential and the shape of the market for future earnings. Fitch rated Thomson-Reuters last June. Stock-holders and the executives must have been pleased at the A- rating. But what caught my eye, was this paragraph, which pretty much sums up what Ken Svengalis has been preaching about how the legal publishing and vending marketplace (and the business publishing as well, I suppose as another "core business") have become oligopolies in which the few big players have essentially come to control the market place:
Fitch recognizes that there are meaningful barriers to entry in TRI's core businesses and that there are a limited number of well-capitalized competitors that compete predominantly on product differentiation, quality and delivery (rather than on price).Tip of the OOTJ hat to my wonderful colleague, Christopher Chiofolo, who showed this to me and also explained the financial reports that compared T-R's income to its competitors, showing that it essentially is making about twice the profit of the average business in its class. Hmm.