Fox in Print

July 6, 2007 8:31 AM

Newsfilter: Murdoch Buys The Wall Street Journal/Dow Jones After some protests from editors about what sort of control News Corp. would have over the paper, a deal has been reached with the Bancroft family that runs the paper to sell for $5 billion. Murdoch gave up some demands for editorial control but still has the ability to hire and fire editors at will, making this the same sort of fig leaf agreement he made with the Times of London.
posted by destro (52 comments total)

Does this make him as powerful as Hearst was at his peak?
posted by JeremyT at 8:36 AM on July 6, 2007

Wait, so now the editorial page of the Wall Street Journal is going to be a bunch of crazed reactionaries in the thrall of big business interests?!
posted by rkent at 8:36 AM on July 6, 2007 [11 favorites]

Dow Jones is denying it.
posted by chlorus at 8:37 AM on July 6, 2007

Maybe this is good news. Maybe now that the WSJ is wholly in the hands of conservative propagandists (rather than just the editorial page as previously claimed), some organization will start a rational business publication. Maybe.
posted by DU at 8:38 AM on July 6, 2007

Dow Jones is denying it.

Hmmmmm. Planted story, the original? Curious.

And yes, I think this does pretty much greenlight Citizen Murdoch.
posted by kittens for breakfast at 8:41 AM on July 6, 2007

I think the feeling has been that while the Wall Street Journal may be very pro-business, they still do journalism and try to keep their opinions in the Op-ed section.
posted by destro at 8:41 AM on July 6, 2007

What do you think drives Murdoch? I always thought that megalomania was a fictional device, or at least overstated. But can one man really desire ultimate power, like a covert rendition of a Bond villain? Why? How much power is enough?

Still, he'll be dead soon. Old age is 100% effective. We should be thankful that the four score years and ten is a limiting factor on any megalomaniacal desires.
posted by humblepigeon at 8:42 AM on July 6, 2007 [3 favorites]

Old age is 100% effective.

Dude, he bought Dow Jones. Now he has all the supersecret chemical salves that retard aging. Look for Murdoch to go into "retirement" soon and a younger, previously-unknown relative that looks remarkably like him as a young man to be named heir.
posted by DU at 8:45 AM on July 6, 2007 [4 favorites]

What I'd really like is a drawing of Rupert Murdoch in drag, being propositioned by a Chinese Communist Party member.
posted by chlorus at 8:46 AM on July 6, 2007

I didn't trust a word the Wall Street Journal printed before, but Murdoch's movements are still pretty creepy. I can't watch more than about 20 seconds of Fox News at a time. It's like they're reporting events from a parallel dimension.
posted by EatTheWeek at 8:47 AM on July 6, 2007 [1 favorite]

Question: Does this give Murdoch control over what stocks constitute the DJIA? I assume yes?
posted by empath at 8:55 AM on July 6, 2007

Always pissed me off that the satellite channels always ran "Wall Street Report" on the (so-called) Left band.
posted by RavinDave at 8:56 AM on July 6, 2007

Isn't Murdoch related to the Tessier-Ashpool clan? I've also heard Murdoch sometimes uses an alias, Josef Virek...
posted by KokuRyu at 8:58 AM on July 6, 2007 [2 favorites]

Ahem.
posted by armage at 9:01 AM on July 6, 2007 [1 favorite]

I guess this would make Murdoch the ultimate NewsFilter.
posted by It's Raining Florence Henderson at 9:07 AM on July 6, 2007

Coming up in the Wall Street Journal, are Paris and Lindsay going too far? We have details. Also, do freedom fries really make you fat? Surprising answers coming up, and just ahead Dr. Phil stops by and tells us how we can improve our lives. All that and business news when we return.
posted by StarForce5 at 9:15 AM on July 6, 2007

Whew. One less paper to read.
posted by The Bellman at 9:16 AM on July 6, 2007 [1 favorite]

I wish The Weekly World News would buy it. I'm dying to see the BatBoy done in that faux-engraving style.
posted by George_Spiggott at 9:33 AM on July 6, 2007 [6 favorites]

Cue music appropriate for the death throes of a dying medium.
posted by sfts2 at 9:34 AM on July 6, 2007

I think the feeling has been that while the Wall Street Journal may be very pro-business, they still do journalism and try to keep their opinions in the Op-ed section.

Fake Steve covered just exactly how they don't do this.
posted by bonaldi at 9:43 AM on July 6, 2007 [1 favorite]

i used to smoke pot with rupert's youngest son in college. someday all of this will be his and he will be able to buy pot made of gold. on a related note, james is the only person i know who's wsj faux-engraving style potrait i have actually seen.
posted by snofoam at 9:56 AM on July 6, 2007

ain't laissez-faire simply grand?

We'll see if its cornerstone institution gets completely corrupted by its internal dynamics.

On special days, Smith's Invisible Hand fists itself up someone, good and hard.
posted by Heywood Mogroot at 9:56 AM on July 6, 2007 [3 favorites]

The movie Network becomes more of a reality all the time.
posted by nofundy at 10:08 AM on July 6, 2007

In defense of the Bancroft family, newspapers aren't a great value proposition in terms of investments, and Murdoch is one of the few people who knows how to make money in media (even if some of his newspapers holdings are merely loss leaders, like the New York Post).

So you own a newspaper. You know that the money you have invested in it now is probably going to be stagnant or worth less -- maybe a lot less -- 10 years down the line. The newspaper industry's Darth Vader offers you big money for it, which is money that he has shown he can turn into even more value over time, or money that you could simply invest in a better place. What are you going to do? Turn it down?
posted by deanc at 10:20 AM on July 6, 2007

It'll get interesting when the talent walks. Newspapers don't write themselves.
posted by mullingitover at 10:25 AM on July 6, 2007

The newspaper industry's Darth Vader offers you big money [...] What are you going to do? Turn it down?

yes
posted by destro at 10:31 AM on July 6, 2007 [1 favorite]

"In defense of the Bancroft family, newspapers aren't a great value proposition in terms of investments, and Murdoch is one of the few people who knows how to make money in media (even if some of his newspapers holdings are merely loss leaders, like the New York Post)."

Umm... Actually, newspapers make insane profits, even as readership has been declining. The last numbers I heard, which were from around 2004, were an industry average of 12% profits, which is INSANE. It's just that they've been increasing profits through layoffs and increased automation, so papers that jumped on that early are really close to the bone, and investers want those profit levels to continue indefinitely, otherwise they'll start selling stocks.

But I was just talking to a guy in the office who used to work at the Belgium office for the WSJ, and his general belief was that the WSJ is fucked. Right now, there does exist a general liberal bias (well, as much as the liberal "bias" is sort of inherent to news organizations) among reporters, with only the brass being ideologues (he had an amusing anecdote about people being "groomed" for years before being allowed into the editorial department's offices). That's all gonna get the wash.
posted by klangklangston at 10:39 AM on July 6, 2007 [1 favorite]

Basically, this happens to all family enterprises sooner or later, whether privately held or public companies in which the family retains effective control, such as Dow Jones and New York Times. Once ownership is sufficiently dispersed (ie, no longer just siblings or cousins, but second and third cousins), it's just about inevitable. You have a set of distant relatives, some of whom don't even know each other, who have a chunk of their wealth tied up in a single company. If that company doesn't produce returns that match the stock market as a whole, over time, the distant cousins who are not directly involved in the firm get antsy. Sometimes, shareholders who don't have a board seat bring shareholder lawsuits demanding change. To avoid this, family enterprises of this kind are forced to act almost like public companies in terms of meeting quarterly profit targets. Any vestiges of benevolent management go away. And if an offer well above market value comes over the threshhold, the board acts on its fiduciary duties to the stockholders and sells. This has been one of the factors in the consolidation of the newspaper business in recent decades, since many local newspapers had been under family ownership for 3 or more generations.
posted by beagle at 10:40 AM on July 6, 2007

Klangstonklangston:
Some newspapers do earn very high returns, but ad sales are flat or declining, and circulation is declining as you note. As a result, newspaper firm stock prices have gone nowhere, and that's what's forcing sales like the recent Knight Ridder sale, and is part of the dynamic behind this one.
posted by beagle at 10:44 AM on July 6, 2007

I'd have to agree with The New Yorker's assessment of The Times. It really has gone downhill - turning more into an upscale tabloid than anything else. So if I was a WSJ reader, I would not want Murdoch to take over. The quality of the papers he owns suffers, and it becomes obvious to the readers.
posted by djgh at 10:49 AM on July 6, 2007

I just hope the Page 3 girls are actual photos and not the WSJ woodcut images.
posted by birdherder at 11:10 AM on July 6, 2007 [4 favorites]

awesome!

Capitalism eats itself.
posted by geos at 11:37 AM on July 6, 2007

What I'd really like is a drawing of Rupert Murdoch in drag, being propositioned by a Chinese Communist Party member.

Only if it's in that faux-engraving style...
posted by Dreamghost at 11:55 AM on July 6, 2007

Isn't Murdoch related to the Tessier-Ashpool clan? I've also heard Murdoch sometimes uses an alias, Josef Virek.

Well played, sir. Well played.
posted by joe lisboa at 11:55 AM on July 6, 2007

Fake Steve covered just exactly how they don't do this.

"Jobso, it's mentioned on the front page of the hardcopy journal"

I guess it's supposed to be satire, but that was a very weak argument against the WSJ.
posted by mrgrimm at 12:00 PM on July 6, 2007

What rkent said ... I just read a OpEd from th WSJ that was written by Ted Nugent for chrissake ... I really don't think Murdoch is going to make any worse than it already is (and it's pretty abysmal).
posted by Relay at 12:11 PM on July 6, 2007

Basically, this happens to all family enterprises sooner or later, whether privately held or public companies in which the family retains effective control, such as Dow Jones and New York Times.

So Rupert Murdoch is actually some kind of market force who buys out all family businesses eventually?

(Yeah, I know what you meant, but the point of the story isn't that just anyone is buying the WSJ, but that it's Rupert "Fox 'Darth "Ernst Blofeld" Vader' News" Murdoch.)
posted by JHarris at 12:13 PM on July 6, 2007

Warren Buffet had an usually good take on the Dow Jows/WSJ. They had everything and let it go. I think we forget, I know I did, that Dow Jones owned all information on Wall Street. They totally blew the transition to electronic form and gave up a large portion of built up prestige when they lost to Bloomberg. Let's face it, they should have put Dow Jones terminals in every office in Wall Street. That is not to say that the quality of the WSJ went down at all, it just became more mainstream. It is still profitable but not as profitable as it could have been and I directly blame these dynastic families for it.

What is the famous saying, the first generation makes the money and the second generation tries to keep it? That's exactly what happened. While businessmen across the company may read the WSJ before going to work, traders and the like see their news filter through Bloomberg boxes. Sure, their investigative reporting and coverage of the East may be good, but it is far more valuable to be a Bloomberg than a Dow Jones.

It is not as if the WSJ is the only paper out there. I subscribe to the pink lady (Financial Times) and find its international coverage and style much, much better. The Economist covers what the FT doesn't. The only time I found myself reading the WSJ was for an occasional human interest story or editorial piece. To think that the FT could not take the dozen or so reporters and staff writers that make the WSJ great is ludicrous. Stick a 10 page USA edition to the FT and there you go, let Rupert cater to the crowd that bought Trump's Art of a Deal.
posted by geoff. at 12:32 PM on July 6, 2007

Actually, newspapers make insane profits, even as readership has been declining. The last numbers I heard, which were from around 2004, were an industry average of 12% profits, which is INSANE.

Yep. We're pitching for 30% profits here for the third year running ... but we're doing it by laying off staff furiously and cutting everything.
posted by bonaldi at 12:33 PM on July 6, 2007

Yeah, which is why the LA Times was running Craigslist ads looking for local bureau reporters who would be "independent contractors," who they could pay, like, $19k a year to live in Pasadena.
posted by klangklangston at 12:40 PM on July 6, 2007

So Rupert Murdoch is actually some kind of market force who buys out all family businesses eventually?

Murdoch may not have donned invisible gloves and a spandex suit bearing a stylized "M." But how would you argue his decision isn't shaped by precisely the same forces that drive markets every day? And why are Murdoch's reasons for buying likely to be substantially different from any other potential buyer's?
posted by namespan at 12:51 PM on July 6, 2007

I’m with destro . For the most part with business news you have to have a straight story. Which is why your editorial page can look like partisan hackery. Once the business news get more PR driven, positional, whatever - it gets less useful. Once you move from “this is happening” to “this is what should happen” or just reprint the other crap floating around because you’ve cut so many reporters you can’t cover much then people aren’t going to read the WSJ for information anymore. And it’s going to go into the toilet.

“Now he has all the supersecret chemical salves that retard aging. Look for Murdoch to go into "retirement" soon and a younger, previously-unknown relative that looks remarkably like him as a young man to be named heir.”

Whoa, DU you blew my mind. Secret anti-aging salves? You’re saying Murdoch ISN’T a vampire?
*stows garlic & stakes*
posted by Smedleyman at 12:51 PM on July 6, 2007

And why are Murdoch's reasons for buying likely to be substantially different from any other potential buyer's?

Most buyers would purchase if they thought it would be a profitable investment. Many of Murdoch's papers are owned and run not to make a profit, but to increase his political influence and dominance over the political discourse while operating at a loss. He then uses the papers to blackmail political figures.
posted by stammer at 1:13 PM on July 6, 2007

Most buyers would purchase if they thought it would be a profitable investment. Many of Murdoch's papers are owned and run not to make a profit, but to increase his political influence and dominance over the political discourse

Yes, that's why he's so very poor.
posted by humblepigeon at 1:18 PM on July 6, 2007

Sarcasm aside, that movitation does mean he's not just the same as "any other buyer".
posted by stammer at 1:40 PM on July 6, 2007

"Yes, that's why he's so very poor."

Well, no. The difference is that the NY Post isn't run to make the NY Post a profit, it's run to help Murdoch profit elsewhere.
posted by klangklangston at 1:47 PM on July 6, 2007

And why are Murdoch's reasons for buying likely to be substantially different from any other potential buyer's?

Because Murdoch is one of the few people in the world who is good at owning newspapers. It is a shame that WSJ is going to go down the tubes in the wake of this deal, but my guess would be that his ownership will result in greater value for shareholders and larger circulation. There aren't many other potential buyers who could do something like that.

That said, the "serious readers" are probably going to end up dropping the paper for the Financial Times, leaving the WSJ to rely on the "Art of the Deal" consumers and other "aspirational" readers, who seemed to be the ones who were the main fans of the editorial page.
posted by deanc at 1:50 PM on July 6, 2007

Most buyers would purchase if they thought it would be a profitable investment. Many of Murdoch's papers are owned and run... to increase his political influence

I agree that's part of Murdoch's motivation. My guess, though, is that most buyers of newspapers also have at least somewhat similar interests.

Though Murdoch sure does seem to use the instruments more bluntly...
posted by namespan at 2:41 PM on July 6, 2007

Thet should not have allowed that. Rupert Murdoch has far too much power as it is, to the extent where he bragged about pushing the Bush line for war in Iraq. This will not end well.
posted by rougy at 5:04 PM on July 6, 2007

They should not have allowed that.
posted by rougy at 5:07 PM on July 6, 2007

snofoam writes "someday all of this will be his and he will be able to buy pot made of gold."

Why? Real pot is more expensive. Well, if it's any good.

He'll probably get it. If they're interested at all in selling, he has enough to make it happen. Watch him turn it into the business version of the New York Post. Many WSJ columnists and editors are already on Fox News. He'll just sleaze it up, like he does everything else. Sad thing is it just may be wildly successful.
posted by krinklyfig at 8:56 PM on July 6, 2007

I've read the editorials. Its already been sleazed up.

It would be wrong if they didn't let him buy this as its pretty much a Fox production as anything else he owns.
posted by damn dirty ape at 2:09 PM on July 31, 2007