The McGraw-Hill Companies

The McGraw-Hill Companies
Name	The McGraw-Hill Companies
Foundation	0 1888
Founder	James H. McGraw
Location	New York City, New York, U.S.
Key people	Harold McGraw III (Chairman & CEO)
Industry	Publishing, Financial services, Education
Products	Textbooks, Standard & Poor's indices, BusinessWeek
Revenue	▲ US$6.0 billion (2011)
Num employees	23,000 (2011)

The McGraw-Hill Companies was a publicly traded American multinational corporation headquartered in New York City. For over a century, it was a dominant force in educational publishing, financial information, and business media. Its operations were divided into three core segments: McGraw-Hill Education, Standard & Poor's, and McGraw-Hill Financial. The corporation's history is marked by strategic expansion from its roots in technical journals to becoming a global provider of credit ratings, benchmarks, and learning materials, before undergoing a significant breakup in the 21st century.

History

The company's origins trace back to 1888 when James H. McGraw purchased the *American Journal of Railway Appliances*. He later merged his interests with those of John A. Hill, forming the partnership McGraw-Hill Book Company in 1909. The firm grew rapidly by publishing technical and engineering manuals, capitalizing on the Industrial Revolution in the United States. A pivotal merger in 1917 created the McGraw-Hill Publishing Company, Inc., which expanded into business magazines like *BusinessWeek*, acquired in 1929. The post-World War II boom in American higher education drove massive growth for its textbook division. In 1966, the company acquired the financial information firm Standard & Poor's from the McCormick family, marking a decisive shift into financial services. The corporation was listed on the New York Stock Exchange under the ticker symbol MHP.

Business segments

The corporation operated through three primary divisions in its final structure. The McGraw-Hill Education segment was a leading global publisher of print and digital educational materials for the K-12, higher education, and professional markets, with notable imprints like Glencoe and McGraw-Hill Ryerson. The Standard & Poor's segment provided independent credit ratings for governments, corporations, and structured finance instruments, and maintained iconic market indices like the S&P 500 and the Dow Jones Industrial Average (through a joint venture). The McGraw-Hill Financial segment, which included S&P Capital IQ and S&P Indices, delivered data, research, and analytics to global financial institutions, complementing the work of Moody's and Fitch Ratings.

Corporate governance

The company was governed by a Board of Directors elected by shareholders, with Harold McGraw III serving as both Chairman and Chief Executive Officer for much of the early 21st century. Key board members often included leaders from academia, finance, and former government officials, such as Edward B. Rust Jr. of State Farm Insurance. Executive compensation and succession planning were subjects of shareholder proposals, especially during periods of corporate restructuring. The board oversaw significant strategic shifts, including the exploration of a sale for the education division and the ultimate separation of the company's core businesses, responding to pressure from activist investors like the Harbinger Capital Partners fund.

Financial performance

For the fiscal year 2011, the corporation reported revenues of approximately US$6.0 billion. The Standard & Poor's segment was consistently the most profitable, driven by its near-duopoly in the credit ratings market and the licensing of its indices. The McGraw-Hill Education segment faced declining revenues due to budget cuts in U.S. public schools, the growth of the used textbook market, and the slow adoption of digital products. The company's stock performance was closely tied to the health of the global financial markets and regulatory scrutiny of the ratings industry. Major financial milestones included its listing on the Fortune 500 and consistent dividend payments to shareholders.

Acquisitions and divestitures

The company's growth was fueled by strategic acquisitions across its history. Significant purchases included the educational publisher Tribune Education in 2000 and the testing company CTB/McGraw-Hill. In a major divestiture, it sold its television station group to the E. W. Scripps Company in the 1990s. The most transformative period began in 2011 with the sale of *BusinessWeek* to Bloomberg L.P.. This was followed by the 2012 sale of the entire McGraw-Hill Education division to the private equity firm Apollo Global Management. The remaining company, focused on financial information, was renamed S&P Global in 2016, completing the corporate split.

Criticism and controversies

The corporation faced intense criticism, primarily directed at its Standard & Poor's unit. It was widely scrutinized for assigning high credit ratings to mortgage-backed securities and collateralized debt obligations that failed during the subprime mortgage crisis, a key factor in the Financial crisis of 2007–2008. In 2013, the U.S. Department of Justice filed a civil lawsuit alleging fraudulent ratings, resulting in a US$1.375 billion settlement. The educational division also faced controversies, including accusations of political bias in Texas textbook adoption hearings and a federal investigation into the CTB/McGraw-Hill testing contract with the State of California. These events significantly impacted the company's public reputation and spurred calls for increased regulation of the credit rating agency industry.

Category:Companies based in New York City Category:Publishing companies of the United States Category:Financial services companies of the United States