Dow Jones Needs Murdoch
News Corp. Chairman Rupert Murdoch’s bid for Dow Jones is nothing to worry about. He will protect the integrity of The Wall Street Journal. Pro or con?
Pro: Raunchy but Respectful
It’s easy to portray Rupert Murdoch as some sort of a wild-eyed renegade eager to feed America its daily dose of bad TV, salacious stories, and right-wing drivel. No one will ever confuse the Fox show Cops with great drama, or the cover stories of his tawdry New York Post with deep-thinking journalism.
But Rupert Murdoch, above all, is a savvy businessman with an eye for what sells. Sure, sex sells. But so does great, analytical journalism, the kind that The Wall Street Journal has been providing its readers since its founding in 1882 by reporters Charles Dow, Edward Jones, and Charles Bergstresser.
What Murdoch would be buying is the Wall Street Journal name, and he would do little to diminish what it stands for to its very upscale, literate readership. For those readers, that’s what sells, and through his 53-year career, the News Corp. (NWS) CEO has shown a keen understanding of the power of each of the brands he has bought.
Sure, when you think of Fox, you think raunchy, as in the stuff that escapes from Bart Simpson’s mouth. But Murdoch has done precious little to besmirch the brand of National Geographic after launching the NatGeo cable channel in 2001. Heck, News Corp. even publishes Bibles through its Zondervan unit.
So wasn’t hard to take Rupert at his word when he told Fox News that the Journal "is the greatest newspaper in America, one of the greatest in the world" and that "it has great journalists, which deserve, I think, a much wider audience." That doesn’t sound like a guy who intends to rip through the newsroom or massively change its editorial direction. The Journal likely will continue to offer unbiased news accounts and smart analysis, and strive to beat its competition—all of the things Murdoch no doubt admires about "the greatest newspaper in America."
Still, there will be changes, as there always are in the game of mergers and acquisitions. Murdoch told Fox News’ Neil Cavuto that the Journal "needs to be part of a bigger organization to be taken further."
What does that mean? Probably some of the same razzle-dazzle marketing and promotion that has made a growth business out of News Corp.—as well as Fox network, the Fox News cable channel, heck, even those Bibles. If he wins the Journal, we will no doubt see the paper’s name plastered all over Sunday NFL telecasts, in Kiefer Sutherland’s hands before he battles the bad guys on 24, and very likely sponsoring American Idol. But it will still be the same Journal he paid dearly to win, not change.
Con: High-Brow No More
With Rupert Murdoch’s pursuit of The Wall Street Journal, Dow Jones employees are right to fear a future as a cog inside a MySpace/Fox News/cable-TV contraption.
While Murdoch may personally enjoy the daily ritual and tradition around newspapers, his keen business sense knows that many people do not. Which is why the Journal would be little more than an obscenely expensive brand to help anchor the business-news cable channel News Corp. aims to launch this year.
In one swoop, Murdoch would acquire the keys to making this fledgling channel a success. Journal reporters would become “talent” to be trotted out for the cameras. He could use MySpace to draw a younger demographic to the Journal’s new lifestyle and consumer offerings. Fox News could cross-promote and share studio space. Journal scribes could even start their own pages. The synergy orgy would be awesomely tacky.
And then there’s the financial angle: At $60 a share, Murdoch is offering a 65% premium—and probably far more if he’s pressed—for a company that has floundered for years. So what’s in this for the lowly News Corp. shareholder? Is there much to like in spending $5 billion for a brand name, even if it is a mighty useful one? When might this pay off?
Sadly for Murdoch, the Online Journal is no MySpace. But one way it may yield some return, as DJ’s employee union ranted in a May 1 press release condemning the deal, is if Murdoch can squeeze enough costs from the company. To placate News Corp. shareholders, the Journal acquisition would need to pay off handsomely in the returns of the new cable channel, which faces formidable entrenched competition in the form of CNBC and its Jim Cramer-led pack of stars.
On the journalistic front, the Journal has waged a consistent battle to keep its right-wing editorial page separate from its generally balanced news pages, and its journalists have rolled their eyes at each other and gone about the task of crafting great business coverage.
But mix Murdoch’s relentless pursuit of money with his deep ardor for bashing anything he perceives as liberal, and what sort of independence will the Journal’s new owner tolerate? Under Murdoch, the Journal could turn into a new New York Post with prettier writing.Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.