Business News

Michael Bloomberg to return as chief of company he founded

Andrew Ross Sorkin
Michael Bloomberg
Bloomberg/Contributor | Bloomberg | Getty Images

Michael R. Bloomberg will reassume the leadership of his business empire only eight months after ending his final term as mayor of New York.

Late Wednesday, Mr. Bloomberg told close confidants and senior executives of Bloomberg L.P., a financial data and media company, that Daniel L. Doctoroff, its chief executive and a longtime friend and lieutenant, would leave the company at the end of the year and that he would take over.

For years, Mr. Bloomberg had insisted that he had no intention of returning full time to the company he founded.

Read More Bloomberg terminal now following bitcoin prices

When he left politics, Mr. Bloomberg was expected to devote most of his time to giving away his $32.8 billion fortune. Those philanthropic efforts — on issues like gun control, immigration and public health — were supposed to take up much of his time and he would "most likely spend a few hours a day working from his new desk on the fifth floor," at Bloomberg's offices, according to a memo Mr. Doctoroff sent employees in January.

A Bloomberg terminal killer?
A Bloomberg terminal killer?

But in recent months, Mr. Bloomberg — who still owns 88 percent of the company — has become an increasing presence at Bloomberg's Lexington Avenue headquarters. Those "few hours" soon turned into six and seven hours a day with Mr. Bloomberg taking a hands-on role in meetings and strategy decisions. Mr. Doctoroff, a former deputy mayor of New York and private equity executive, told Mr. Bloomberg about two weeks ago that he planned to resign, frustrated with how the leadership dynamic had shifted with Mr. Bloomberg back in the building. Mr. Bloomberg urged him to stay and remain chief executive, but Mr. Doctoroff demurred.

"This wasn't the plan," said Mr. Bloomberg, sitting next to Mr. Doctoroff on Wednesday at a coffee shop on the Upper East Side. "It was his idea. If it was up to me, he would have stayed."

Mr. Bloomberg said he fell in love again with the company that he founded in 1981. He said that after vacationing for a couple of weeks in January and working on his philanthropy, he realized that he felt most excited by his work at Bloomberg L.P.

Read More

He will take charge of a company that is significantly bigger and more powerful than the one he left more than a decade ago, but it also perhaps faces more challenges. Bloomberg L.P. is at something of a crossroads, developing new businesses in the hopes of making it more accessible to a broader consumer audience.

Under Mr. Doctoroff, who joined Bloomberg L.P. just six months before the financial crisis flared in September 2008, the company's revenue has jumped to more than $9 billion, from $5.4 billion. Subscriptions to Bloomberg's signature financial-data terminals — which rent for about $20,000 a year — have grown to 321, 000, from 273,000, despite a shrinking financial sector. With many newsrooms shrinking, Bloomberg has added more than 500 reporters and editors during his tenure.

Still, the company's growth has slowed, particularly abroad. And its news division endured criticism last year in the face of accusations that it withheld a report about government corruption in China to protect its business interests there. Separately, it came under fire after acknowledging that its reporters used the company's terminals to extract subscribers' private information.

Read More System isn't 'rigged'—Bloomberg defends HFT

Mr. Doctoroff, who remains a friend of Mr. Bloomberg and will join the board of his foundation, explained his decision to step down: "When Mike decided he wanted to spend some time at the company, and then spent more time, obviously things changed." He added, "It isn't the job I had for the past six years. It's his — he wants to be involved. He doesn't want to consult with me on everything. I get that."

With a wry smile and a laugh, Mr. Doctoroff said: "Mike is kind of like God at the company. He created the universe. He issued the Ten Commandments and then he disappeared. And then he came back. You have to understand that when God comes back, things are going to be different. When God reappeared, people defer."

Bloomberg's perception of Wall Street
Bloomberg's perception of Wall Street

Still, whatever fissures exist below the surface, both men insisted that there was no fight over leadership. "The press always wants to write about a battle," Mr. Bloomberg said. "There was not a After a series of tiffs, mostly over not consulting each other on small decisions and conversations, Mr. Bloomberg went to Mr. Doctoroff and said, "The only answer is for me not to be here." Mr. Doctoroff said he replied, "Mike, that's not the answer that I want or that you want. This is your company. You ought to get out of it what you want."

Ultimately, Mr. Bloomberg agreed with that assessment. "If he asked me as a personal friend, he should leave because he wants to be the C.E.O. of a company and with my name on the door, at best he could do is be co-C.E.O.," he said.

While Mr. Doctoroff made strides to reimagine some of Bloomberg L.P.'s closed culture, he was stymied by some of the company's byzantine political fiefs. For example, Mr. Doctoroff clashed early on with Matthew Winkler, the head of Bloomberg's sprawling news division. Mr. Doctoroff had little power to remove Mr. Winkler, a close confidant of Mr. Bloomberg, who had started the news operation in 1990 and helped write Mr. Bloomberg's autobiography, "Bloomberg by Bloomberg." Today, Mr. Doctoroff, after learning to work with Mr. Winkler over the years, said he had only respect for his colleague.

Under the direction of Mr. Winkler and Justin B. Smith, the head of Bloomberg Media Group, the company's news division is in the middle of a broader strategy shift to broaden its influence beyond Wall Street trading floors.

Next month, it will start Bloomberg Politics, the first of a series of digital brands that will focus on topic areas but cut across television, web video, print, radio and its lucrative terminals, which are still responsible for the vast majority of its annual revenue.

More from the New York Times:

Bloomberg's Bruised Legacy
Michael Bloomberg's Harder Sell
Bloomberg Plans a $50 Million Challenge to the N.R.A.

Bloomberg L.P. made splashy hires to start the politics site, bringing on the journalists John Heilemann and Mark Halperin. Mr. Bloomberg also played a pivotal role in creating Bloomberg View, an op-ed project started in 2011 that publishes opinion pieces from brand-name journalists.

Norman Pearlstine, a former Bloomberg executive, said that he thought that with Mr. Bloomberg back in the fold, Mr. Doctoroff felt hamstrung trying to run the company.

"I just think it was frustrating," said Mr. Pearlstine, now chief content officer at Time Inc. "He didn't want to go back to being deputy mayor."

Mr. Bloomberg said that he felt energized being back at the company, and that his increased involvement would not get in the way of his foundation work. He said that there was than he expected to do day-to-day at Bloomberg Philanthropies, whose offices are on the Upper East Side in a separate building from the company's headquarters.

"There's not a lot to do," he said. "Patti Harris is running it. We set the policies. I'll go when there is a board meeting. They execute it. Whereas at Bloomberg, there's always lots of things going on. There's decision to make all the time. New projects."

Mr. Pearlstine suggested that without a big city or a big business to run, Mr. Bloomberg was restless. "I think it was more 'what am I going to do every day?' " he said.