WHAT'S NEXT: INNOVATIONS IN NEWSPAPERS

Jim Cramer writes in thestreet.com about the 10 Stories You Won’t Read About Dow Jones’ Merger Missteps

I keep thinking about what The Wall Street Journal would write about the following company’s takeover trials.

1. The company gets the takeover bid and the senior officers sit on the bid and disclose it to no one as the stock goes up, making it likely that there will be trading on inside information. That’s why the law wants timely dispersal of material information. Can you imagine the field day the Journal would have with that?

2. There’s an incredible amount of call-buying after the receipt of the bid — but before it is announced as a scoop, no less. Who knows how long the company in question would have sat on it?

3. The board turns out to be a total nonentity and doesn’t even take a position on the bid. Can you imagine what the Journal’s reporters and editors would do with that?

4. The controlling shareholder family’s spokespeople, before the bid is even cold, say the word is “no.” Without even polling the family? Can you get more duplicitous? The polling turns out to be wrong.

5. The scion of a subsidiary chain without any reputation for greatness or even goodness turns out to be the most vociferous board member against the bid. (OK, by now you’ve figured out that I’m abstracting the Dow Jones situation with this News Corp. bid from Rupert Murdoch. Frankly, I would rather work for the worst Murdoch property than the best Ottaway paper. Nobody takes Ottaway to task for that “irony.”)

6. There seems to be only one kind of independence the Journal cares about: reporting independence. How about editorial independence? Why doesn’t anyone there talk about how the editorial page’s view would be preserved under Murdoch but not other owner in the media? Why isn’t that pointed out? Ron Burkle sure wouldn’t preserve that. I think that’s a great point in favor of Murdoch.

7. The resumes are flying out of the bid-for company, yet it never gets reported. (And everyone knows it.)

8. The numbers are so bad since the year began that the hypothetical company in question would be laying off people right now, but management wants to wait because it would look bad and make the need for a deep-pocketed bidder much more evident. (Wouldn’t do to look like they need Murdoch, would it?)

9. The paper seems reluctant to report on the myriad failures to diversify away from anything except for newspaper. (So what? The reason you needed the diversification was to pay for the paper. Instead, all we hear about is the need to preserve purity. You know how preserve purity? You make money away from it.)

10. The new travesty: How could all of these promotions be made today fully knowing that the paper and the company will most likely be sold? What the heck? Where’s the questioning and reporting of that?

Nah. Too close to home.

This story, if it had been any other business, not just the press, would have produced an endless series of stories about how rogue this company has been, how anti-shareholder, frankly, how disgraceful this whole episode has been.

Fortunately for Dow Jones, its executives, its board members and the clueless controlling family, the company owns the most important business newspaper in the country.

What a break.

He is right.

And politically incorrect.

Murodoch or Bloomberg could do it better.

And one of them will.

For sure!

Nat Ives in Advertsing Age asks Al Neuharth:

Will Rupert Murdoch succeed in buying Dow Jones?

And Neuharth responds:

I wrote a column when his offer was first announced in which I predicted that Murdoch will wind up owning Dow Jones, and that’s more and more clear as time goes by.

What happens in these situations is that traditionally blood runs thicker than money.

But the newspaper families — except for the Sulzbergers and the Grahams, which have kept smart, dedicated journalists from inside the family in charge — by the time they get to the third or fourth generation, they are not interested in newspapers as much as dividends.

He is right.

Roy Greensland liked my last comment about Murdoch.

Well… here’s another cheap shot.

This one is from an art director (a very bad one if this is what he produces) from The New York Times.

Let me just add one thing:

The Bancroft family is the same one that, for decades, produced a very poor Wall Street Journal.

The credit for the most recent one belongs to Barney Kilgore, who, in the 50’s, changed this newspaper for ever.

He was a great editor.

Dow Jones earned more than $13 million in 1966, the last full year of Kilgore’s tenure, compared with some $211,000 in 1945, when he officially became chief executive.

So… the Bancrofts and the Wall Street Journal don’t need to be afraid of Rupert Murdoch.

They need to be worried about bad editors and bad publishers.

Rupert Murdoch is not an outsider.

He is us.

As good and as bad as all of us in this industry could be.

But he speaks our language.

Not the language of the financial or real state moguls who want to control Dow Jones now.

It’s clear to me that, in general, U.S. journalists, editors and publishers don’t like Rupert Murdoch.

Why?

The U.S. newspaper industry is very parochial.

Go to the participant list of any big international newspaper conference outside the United States and you will find only a few people from this country.

Go to any of their domestic conferences and you’ll find hardly any speakers or presentations from other markets.

Our beloved Leo Bogart used to explain the reasons:

This has been a monopolistic business.

Making a lot of money.

Producing very mediocre news products.

Ruled by advertisers.

Selling the papers almost free.

So…

When somebody comes here and wants to buy The Wall Street Journal, the industry pundits make astonishing “revelations” like this one: “He will control the editorial voice of the paper.”

Oh yes?

Excuse me, but I have been reading the WSJ for many years and the “editorial voice” of the paper was, and is, one of the most right wing voices of the newspaper world.

But more than that: do you know, my friends, ANY newspaper owner that doesn’t control the “editorial voice” of his paper?

C’omon!

The Wall Street Journal under Rupert Murdoch will NOT be able to be more right wing than it is now.

But The Wall Street Journal under Rupert Murdoch will perhaps have a better multimedia and online strategy and business management.

And perhaps he will invest and re-invest some of the money that the Bancroft family is pocketing today from profits and dividends.

If I were a journalist or an editor at the WSJ I would not be worried about who controls the “editorial voice” of the paper, but about if the people who run the company have a serious multimedia and online strategy, are ready to invest a lot of money in that vision and keep the newsroom doing its job as well as it has been — including the “editorial voice” of the editorial pages.

Rupert never has been as right wing than they are now… thanks to the Bancroft family.

The Bancroft family said today:

We will meet with Rupert Murdoch to discuss his $5 billion bid for Dow Jones.

We will consider other bidders and options for the company.

“After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the Family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization which may include News Corporation.”

Well, they want more money.

And they will get more money.

From Murdoch.

Or from The New York Times.

Be ready for the white knight.

And if you have shares of Dow Jones, keep them.

You will make more money than you expected.

At the end of the day, this is Wall Street.

This is business.

Not charity.

Money talks.

Journalists listen.

Following a special meeting of the Board of Directors of Dow Jones & Company held at the request of the Bancroft Family directors, the Family today issued this statement:

“As we have been since 1902, the Bancroft Family remains resolute in its commitment to preserve and protect the editorial independence and integrity of The Wall Street Journal, as well as the leadership, strength and vitality of The Journal and all of the other publications and services of Dow Jones.

“Since first receiving the News Corporation proposal, the Family has carefully considered and discussed among ourselves and with our advisors how best to achieve that overarching objective, while serving the best interests of the Company’s various constituencies.

“After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the Family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation.

“Accordingly, the Family has advised the Company’s Board that it intends to meet with News Corporation to determine whether, in the context of the current or any modified News Corporation proposal, it will be possible to ensure the level of commitment to editorial independence, integrity and journalistic freedom that is the hallmark of Dow Jones.

“The Family also indicated its receptivity to other options that might achieve the same overarching objective.”

The Wall Street Journal has a great story this weekend about the owners of Dow Jones, the Bancrofts, including some old pictures of this low-profile family.

With their roots in Boston, the Bancrofts have lived in a world of show horses, sailing and mountainside estates.

They have done so while being fiercely protective of Dow Jones and its independence from suitors, memorialized in a family maxim: “Never sell Grandpa’s paper.”

Please click on the graphic to see it bigger.