CQ Roll Call, the D.C.-based news organization known for offering in-depth coverage of America’s complex legislative process alongside lighthearted profiles of Washington’s political elite, is set to be acquired by District-based tech start-up FiscalNote, executives from both companies confirmed.
The deal is expected to close later this year.
Under the agreement, London-based Economist Group, which has owned CQ Roll Call since 2009, will own 18 percent of the combined company, making it the largest minority shareholder. FiscalNote founder Tim Hwang will lead the combined company, while Economist Group CEO Chris Stibbs will retain a board seat.
For CQ Roll Call, the deal offers a degree of financial stability by aligning it with a subscription-based data business similar to Bloomberg News’s terminal, as well as a set of data capabilities that could help it against rivals such as Politico Pro. In a recent phone conversation, Stibbs said the publisher would remain closely involved in the business moving forward.
“We’re not cutting the cord here,” he said. “We want to go for the ride with Tim” Hwang.
For FiscalNote, the combination promises to bring newfound legitimacy in Washington’s hallways, where Congressional Quarterly and Roll Call have been trusted sources of information for more than half a century.
Billing itself as “the future of government relations,” FiscalNote says it can accurately predict a law’s chance of passing using data analytics. The company has spent five years building a business aggregating troves of political and regulatory data for business clients. Hwang, a 26-year-old Maryland native who deferred attendance at Harvard Business School to start his company, said the idea to buy a media company came from customers.
“Over the years our customers have consistently been asking us for more content, context and editorial,” Hwang said. “We’ve consistently pushed back on a lot of that stuff because we wanted to stay true to our technology roots and build up our infrastructure and become a true pure-play data company.”
“But,” he said, “at a certain point you have to listen to your customers.”
He says the plan is to build FiscalNote into a global data and information provider along the lines of Thomson Reuters, Bloomberg News and LexisNexis, which have also combined subscription-based data services with news reporting and analysis.
FiscalNote aggregates data from about 30 countries across Europe, Asia, Latin America and Africa. That approach has been bolstered by other acquisitions, such as a January buyout of a Brussels-based company called Shungham, which focuses on the European Union’s complex regulatory environment.
“I think the combination of [CQ Roll Call’s] editorial component, alongside the large-scale data and technology platform that we’ve built, at least initially in the U.S. is going to be really powerful,” Hwang said. “But we’re taking a look at a lot of different options even globally as well to be able to leverage that capability.”
The company has attracted an unconventional group of investors: Dallas Mavericks owner Mark Cuban; Yahoo co-founder Jerry Yang; the sovereign wealth fund of Singapore; the prolific Chevy Chase-based venture fund New Enterprise Associates, and the Winklevoss twins. Retired Gen. Stanley McChrystal, who ran the U.S. Joint Special Operations Command counterterrorism force until 2006, joined its board in 2016.
Hwang said he wants FiscalNote and CQ Roll Call to function as a combined business with a unified strategy and complementary product offerings, and not as a stand-alone subsidiary. Still, he said he wants CQ Roll Call to retain its own brand even as it merges with another firm.
“CQ and Roll Call have very historic brands stretching back almost 70 years,” Hwang said. “We want to make sure we preserve the sanctity of those brands, and the trust that all of Washington and the rest of the world have put in CQ Roll Call.”
Hwang said he wants to preserve the publications’ editorial independence.
“We want to make sure that journalists have as much independence in terms of determining stories, in terms of direction and opinion of their stories as possible,” Hwang said. “CQ Roll Call is very well known in the industry for being nonpartisan. Very unbiased. And I think that’s important for the publication to continue to support.”
Stibbs, the Economist Group chief executive, said he trusts FiscalNote to respect the publications’ independence even as reporters are integrated into the tech firm’s day-to-day operations.
“We value editorial integrity above all else,” Stibbs said. “That’s ingrained in our DNA. We would not consider a transaction with anybody, in any part of our business if we did not believe they would uphold those values. If I didn’t believe that Tim and FiscalNote valued editorial integrity, we really wouldn’t be getting into this transaction.”
Hwang and Stibbs declined to comment on how the two organizations would structure what he called “future product offerings,” but an earlier email from a FiscalNote representative said the combined company would “identify opportunities to include CQ Roll Call’s news and authored content into [FiscalNote’s] issue management platform,” implying the information would continue to be offered on a subscription basis. Hwang also declined to comment on whether CQ Roll Call would move into FiscalNote’s offices, noting that the deal is still being negotiated.
For CQ Roll Call and the Economist Group, the partnership with FiscalNote offers a new path forward in an increasingly crowded Washington media landscape. The companies were merged in 2009 under the auspices of the Economist Group, which deepened the company’s emphasis on subscription-based services targeted to Washington insiders and those trying to influence them.
Congressional Quarterly has long been thought of as the preeminent source for committee markup reports, hearings transcripts and the day-to-day proceedings of the House and Senate.
For a time, high paywalls covered by business customers and “issue advertisements” targeted at specific policymakers gave companies such as CQ Roll Call a degree of insulation from the plunging ad revenue that has dogged newspapers everywhere. But in the past decade, an explosion of insider-oriented subscription services — organizations such as Politico Pro and National Journal — have brought new competition to the space.
Washington’s media landscape has been upended over the past decade-plus as magazine and newspaper advertising-based business models were decimated by the rise of the Internet. The Hill, the Atlantic, National Journal and The Washington Post all faltered in the onslaught. Deep-pocketed rivals such as Politico, Politico Pro, Bloomberg Government, HuffPost, Axios, Google, Quartz and a resurrected National Journal emerged alongside the old-media guard. The new companies turned the lucrative inside-the-Beltway media market into a commoditized free-for-all.
FiscalNote’s announcement that it will enter the media industry comes days after the New York Daily News laid off roughly half of its reporters at the direction of Tronc, the Chicago-based media company that owns it.
It was the latest sign of retrenchment in the local news industry; employment at newspapers across the United States has shrunk from 424,000 people in 2000 to 183,300 in 2016, according to the Bureau of Labor Statistics.
“In this industry it’s no secret that there’s been a lot of disruption, particularly on the advertising side,” Hwang said.
Hwang expressed optimism about the combined company’s direction moving forward, though he declined to say whether there would be layoffs at CQ Roll Call.
“We are a business,” Hwang said “My perspective on this is that if customers care about great information, then there are ways to monetize that information.”