Rupert Murdoch - The Media Mogul June 2007

From Australia to the San Antonio, Texas tabloid to News Corp and News International, Mr. Murdoch fascinates all media watchers. Included is up to date information on the Dow Jones speculation and real deals, too. When Murdoch talks, the media world listens, and he has a lot to say about newspapers, broadcasting and new media. 42 pages PDF (June 2007)
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It’s Now Very Clear Why Murdoch Wants Dow Jones So Much, Why The New York Times Launched Its Hatchet Job To Persuade The Bancrofts To Torpedo The Deal, And Why All The Nonsense About News Corp. Decimating the WSJ Is Just A Red Herring

Philip Stone June 29, 2007

As it looks more and more likely that Rupert Murdoch will succeed in his quest for Dow Jones two points are becoming abundantly clear – it’s utter nonsense that Murdoch wants to decimate the Wall Street Journal’s journalism – indeed, the opposite is true, and one of his prime targets is to have the Journal eventually surpass the New York Times as America’s premier newspaper.

(c)graphicnews.com

So given that, it’s really not surprising that the New York Times is already fighting back, starting with its two-part expose this week on Murdoch and News Corp., except for the fact there was very little if anything in there that was new. It was as if the Times was laying it out over two days for a very select audience – the Bancroft family that owns Dow Jones -- as if to say to them “You don’t really want to sell this company to a man like this, do you?”

If Murdoch does an Achilles Heel that could be detrimental to Dow Jones it has been the way he has sucked up to the Chinese political establishment in order to promote his business activities. In 1994 his Star Satellite TV system dropped the BBC that was being a thorn to the Chinese leadership, and in 1998 he ordered his HarperCollins book publishing company to drop a book it was going to publish by Chris Patten, the last British Governor of Hong Kong whom the Chinese government considered to have been an even bigger thorn in the Hong Kong handover negotiations. And the Dow Jones Beijing bureau has been vocal in saying that they fear Murdoch will try and control them not to write articles that will upset the Chinese leadership.

But the fact is Murdoch is not about to do anything than would infringe on the Dow Jones editorial product if for no other reason that it would be bad business. Bluntly put, one doesn’t spend $5 billion to screw up the business!

The New York Times, of course, rehashed all of this with an ulterior motive. It suspected, and Murdoch has now confirmed in a Time Magazine interview, that Murdoch’s real aim with the Wall Street Journal is to usurp the Times’ position as THE American newspaper of record. Within the senior editorial rankings at major news organizations everyone reads the New York Times and then spends most of the day or days that follow doing their own “matchers”.

News Corp actually released a statement on what it thought of the Times’ stories, and, give credit where credit is due, the Times published it. “News Corp. has consistently cooperated with The New York Times in its coverage of the company. However, the agenda for this unprecedented series is so blatantly designed to further the Times’ commercial self interests — by undermining a direct competitor poised to become an even more formidable competitor — that it would be reckless of us to participate in their malicious assault. Ironically, The Times, by using its news pages to advance its own corporate business agenda, is doing the precise thing they accuse us of doing without any evidence.”

Murdoch wants the Journal to become so good that it will be breaking many of the news stories of the day and it will be the Times that will be hard at work on matching those stories. In the Time article Murdoch said, “My worry about the New York Times is that it’s got the only position as a national elitist general-interest paper. So the network news picks up its cues from the Times. And local papers do, too. It has a huge influence. And we’d love to challenge it.”

And as for his vision? “What if, at the Journal, we spent $100 million a year hiring all the best business journalists in the world? Say 200 of them. And spent some money on establishing the brand but went global – a great, great newspaper with big, iconic names, outstanding writers, reporters, experts. And then you make it free, online only. No printing plants, no paper, no trucks. How long would it take for the advertising to come? It would be successful, it would work and you’d make …a little bit of money. Then again, the Journal and the Times make very little money now.”

Murdoch is convinced there is big money to be made in a global, interactive, multiplatform business and finance operation. “There are millions of people throughout the world joining the financial class, and the Journal is the premier financial brand. We have the size and international strength to monetize it globally,” he told Time.

There have been plenty of stories of late about how long Murdoch has craved owning the Journal and that his $60 a share bid for a $36 share was really just a sign of vanity. But there’s a lot more to it than that. Murdoch sees the start-up of his Fox Business Channel as just the beginning in building his global financial news and information empire. He believes at the end of the day he’s going to make money on all this.

His bid was masterful in that it basically shut the door to anyone else who might have thought about a counterbid. Anyone looking at the numbers and seeing Dow Jones as it is now just cannot see any way of making even a long term profit if the buying price is $60 a share. GE and Microsoft took a look at a joint bid. Now these two companies are not exactly hard up for $5 billion, but they couldn’t see a way of turning a profit on the deal, although NBC would love to protect its CNBC from the competition that the Fox Business Channel will bring. There surely must be a fear that the Fox Business Channel will do to CNBC what Fox News has done to CNN.

Next to the plate was Pearson, publisher of the UKs Financial Times, and it and GE looked at setting up a new company that would include CNBC, The Wall Street Journal and the FT. But that fell apart within a week, with GE again just not seeing the financials making any sense.

The big private equity companies have steered clear – the only possible way they could make money would be to cut staffing to the absolute bone and with all the nonsense Murdoch is getting on that score there’s no way they could stomach similar. So the $60 bid cleared everyone away and was high enough to get the Bancrofts, who have said so often in the past they are not interested in selling, taking another look.

After all, editorial integrity is one thing, but a 65% premium is a 65% premium.