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.

Reader Comments

david

Well, it's somewhat of a small sample, but poll results suggest a majority thinks this is a good move (for Murdoch, at least)...

http://www.buzzdash.com/?page=buzzbite&BB_id=15113

Mant

WSJ is not only a newspaper but also a great American institution. There is great prestige and a pride associated with the name. You don't want something like this to fall into the hands of Murdoch. Look at Fox News channel, full of crap. No neutrality whatsoever.

Alec

Murdoch has a long history of pushing right-wing ideals at the expense of responsible journalism. The notion that the man who has brought us the flawed ideology masquerading as sensationalist press called Fox News would consider the WSJ sacred is laughable.

Frank

I don't care that News Corp and Murdoch push a conservative agenda. The WSJ isn't exactly Mother Jones. The editorial pages (which I rarely read) likely won't sound that different under Murdoch.

The problem is the dumbing down of the news and corrupting of the news coverage. I doubt that Murdoch would tolerate honest news coverage in the Journal's Money and Investing section if it embarrassed, even indirectly, his friends in the Bush Administration. What in his history would make you think he would want the Journal to show any more integrity and devotion to truth than any of his other properties?
-- Frank

Joel

The Wall Street Journal is the last credible newspaper in the country. The New York Times, Washington Post, LA Times, etc. practice PC advocacy journalism--so predictable that there isn't a reason to pick up the paper; one knows what the position will be. The Journal is the one paper that tries to present a picture of what is really going on in the world and that adheres to a set of principles it follows whether a story cuts for or against their position.

Murdoch has shown little of awareness and commitment to quality journalism. What the country needs is quality journalism, not propaganda, more light and less heat. If it isn't protected, the light can go out (look at the mainstream media), and Murdoch doesn't know enough to protect and nurture the light of quality.

Bob Crites

Re: Aaron Pressman/Fidelity's Lagging Sales. Aaron overlooks the fact that Fidelity's Contrafund and leading international offerings are closed to new investers, therefore putting performance ahead of sales, which is not the case at American Funds. Apples to Apples please.


Gerardo

It's hardly understandable how anyone can place such an overpriced bid on a business that's loosing ground to the overwhelming reach of the Internet. From my perspective, this looks like more of an individual move to gain power.

Saul Sterman

The undisclosed New York Post source advocating the Yahoo/Microsoft acquisition is now pitted against the undisclosed Wall Street Journal source denying the accuracy. Now here is a conspiracy theory that hasn't been disseminated anywhere; this is the extension of the Dow Jones - News Corp saga.

The New York Post is owned by News Corp, and The Wall Street Journal is owned by Dow Jones. The Bancroft families, who control 62.4% of the Dow Jones voting stock, oppose Rupert Murdoch's News Corp acquisition advances.

The SEC issued subpoenas to both companies investigating the unusual trading volume recorded the day Murdoch's famous letter was received yet before it was made public.

Murdoch would very much like to devour Dow Jones as soon as possible as the crown jewels (Wall Street Journal, Dow Jones Newswires, Baron's, and MarketWatch) are far more respectable (up-market) news sources than what News Corp has today. This is the classic tale of a poor boy who starts out peddling tires while all the time aspiring to buy a Rolls Royce. The irony is that there is more money in the tire business, whereas Rolls Royce cars may have been prestigious at one time but eventually went belly up.

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