WHAT'S NEXT: INNOVATIONS IN NEWSPAPERS

A smart New York friend of mine sent me his two cents on Murdoch and Dow Jones:

First, Murdoch doesn’t invest $5 billion to lose money or destroy the product he buys.

He’s not an idiot.

He’ll put money into the WSJ to build it up.

He gives his readers what they want.

Readers of the SUN want naked breasts, and he gives them Page Three.

Readers of the WSJ want solid, reliable business news.

He’ll make damn sure they get it or he can kiss his five billion goodbye.

And, as he joked in an interview with TIME: if they want Page 3 girls in the WSJ, he’ll make sure they all have MBA’s.

As far as political slant, the WSJ editorial policy is already so far to the right that it makes Murdoch look like a flaming liberal.

So, my bottom line is that he won’t destroy the WSJ, he may make it better, and he will squeeze every ounce of energy
out of the staff which is probably what has them all up in arms in the first place.

Amen.

(Photo by David Mariuz)

Le Tour de France started in London in a big way.

Like Il Giro in Italy, Le Tour de France is a fabulous “brand extension” from newspapers!

Conrad Black goes to jail.

The Daily Telegraph fails to recognize that he saved the paper and The Spectator.

He is not another Robert Maxwell, but has been presented like him.

Wrong.

They were crooks, but at least Lord Black improved his papers.

Journalists must accept the fact.

News Corporation and Dow Jones agree about the sale.

The Bancroft family wanted another buyer but nobody, nobody, offered more than Murdoch.

So, they will sell.

The New York Times is in its new building.

But the financial results are worse than ever.

The Sulzberger family and their (poor) business managers must be accountable for the failure.

The Apple iPhone is a success.

Apple and AT&T sold more than one million sets in the first week.

They could sell more than 10 million sets before the end of the year.

The new Independent on Sunday is doing better than the critics expected.

Well, we were almost alone when all the bloggers were negative.

The new, compact, Sunday news magazine works.

The new ET in Greece confirms its success.

Again, against the conventional view.

INNOVATION was right.

And the ET team did a super job!

From a great, long interview with Rupert Murdoch in Time magazine:

“They’re taking five billion dollars out of me and want to keep control,” Rupert Murdoch was saying into the phone, “in an industry in crisis! They can’t sell their company and still control it — that’s not how it works. I’m sorry!”

Shares of Dow Jones gained almost 2% to close at $59.01 Friday on news that Pearson, publisher of the Financial Times was seeking partners for a joint counteroffer for the company that would compete with Rupert Murdoch’s $5 billion bid.

One company Pearson has approached is General Electric, which owns business news channel CNBC.

If, on the other hand, Murdoch acquires Dow Jones, the Journal will compete more directly with the FT in Europe and Asia, and News Corp.’s plans for a Fox News business channel — which would compete with CNBC — will gain traction.

The Bancrofts, who are reluctant to put the Journal’s editorial integrity in Murdoch’s hands, are expected to warm to a Pearson approach, but it is viewed as “a long shot” because of the difficulty of three-way mergers, the lack of a leader, and the expensive problem of cashing out the company’s shareholders.

This is part of the dirty Dow Jones war.

FT?

No way!

If they are not able to fix their own circulation and advertising problems, how are they going to fix Dow Jones’?

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!

Robert Thompson is the editor of the London Times.

Rupert Murdoch hired him when he was in New York working for the Financial Times.

The FT’s circulation in the U.S. was just 45,000 copies a day.

By 2002, U.S. circulation had increased to 150,000 copies.

He knows business media.

And he is the key editor behind the Murdoch bid for Dow Jones.

Today’s Wall Street Journal has an interesting profile of Robert Thompson that includes these paragraphs:

Mr. Thomson and Mr. Murdoch have an unusually close relationship, said people who know them both.

They share Australian roots and a birthday (March 11, 30 years apart).

Both married women from China and have young children. Wendi Murdoch and Mr. Thomson’s wife, Wang Ping, get along well and speak Mandarin to each other, say people who know them.

The two families have vacationed together.

Kim Fletcher, a British media commentator and former editor of the Independent on Sunday newspaper, said that sharing vacations represents an “astonishing closeness” between the newspaper owner and his editor.

“When Thomson was appointed [Times editor], he was seen to have come from nowhere because he wasn’t on the general newspaper scene — he was from a business-newspaper background,” Mr. Fletcher said.

Mr. Thomson grew up in a working-class family in the Australian bush and got his first full-time job at age 17 in 1979 at Melbourne’s Herald, an evening paper once edited by Mr. Murdoch’s father, Sir Keith Murdoch.

Mr. Thomson missed out on a position as a trainee journalist and became an errand boy instead.

A year later, he became a reporter.

At night, he studied for his journalism degree at the Royal Melbourne Institute of Technology.

In the early 1980s, he moved to the Sydney Morning Herald. Through a sharing arrangement with the Financial Times, the paper sent him to Beijing as a reporter.

In 1989, Mr. Thomson covered the crushing of the Tiananmen Square democracy protests by the Chinese army. He was in the square when a group of soldiers started beating up another reporter, Jonathan Mirsky of Britain’s Observer newspaper.

Mr. Thomson helped pull away Mr. Mirsky, both men recall.

(…) In 2004, the Times had an $89-million loss, according to a person familiar with its accounts. Next year, the paper is expected to make a profit, this person said.

“Rupert Murdoch gets little credit for seeing the Times through the difficult years,” Mr. Thomson said in an email. “It’s fair to say that we are famous for being a not-for-profit” organization, he jokes.

The Times has lost money for most of the time it has been owned by Mr. Murdoch, according to several former editors.

Tall, thin and with a slight stoop because of a back problem, Mr. Thomson is approachable and rarely shows anger, said people who have worked with him.

With a soft voice and an eccentric style of dress — he is fond of thin ties — he stood out in the newsroom, said people who have worked with him.

Not a bad editor.

For the old Times of London…

Or for the new Wall Street Journal.

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.

This is a recent picture of Rupert Murdoch and NY mayor Michael Bloomberg.

Murdoch hosted the 9th annual presentation of the Eric Breindel awards for opinion writing.

And it is an interesting one because Bloomberg could offer more than $5 billion for Dow Jones.

Bloomberg is a private company, but its value must be around $20 billion.

Bloomberg has all kinds of media: real-time computer financial news, radio, television, magazines… but not a newspaper.

Ten years ago, my wife, Deborah Withey, was asked to develop a prototype for a Bloomberg newspaper.

Very factual.

Very graphic.

Short stories.

A few pages.

Broadsheet.

She did a great prototype with the help of a Bloomberg journalist in Detroit, our friend Doran Levin, a former business columnist for the Detroit Free Press.

But the project didn’t go ahead.

So… perhaps now is the perfect time for a business newspaper.

Bloomberg needs to confront the threat of the new Thompson-Reuters.

Right now, nothing would add more value to Bloomberg than The Wall Street Journal.

And if not the WSJ, what about the Financial Times?

In big media consolidation times, Bloomberg needs to expand.

At the end of the day, for Murdoch… Bloomberg could become a more difficult dealmaker to handle than the poor Brancrofts.
(Photo by Getty Images)

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.”

Joseph (Joe) Nocera is a first-class columnist for The New York Times business section.

A former editorial director of Fortune magazine, Nocera writes some of the best analysis about the media industry.

Last weekend Joe Nocera did so, explaining why the Bancroft family has been manipulated for many years by the news management of Dow Jones.

Some key paragraphs of this brilliant and controversial analysis:

I have a theory as to why Dow Jones management has been so inept over the years. It is a company that has long prided itself on being run by journalists.

That was also part of preserving the integrity of The Wall Street Journal. Journalists, after all, would be less likely to damage the paper or cater to advertisers.

But journalists tend to be terrible businessmen; they lack the risk-taking mindset that marks a good chief executive.

Making the kind of big, bold bets that C.E.O.’s have to make all the time in industries undergoing wrenching change, like the newspaper business, just does not play to their strengths, which are observing, critiquing and finding out things.

[…]The one thing Mr. Phillips and Mr. Kann were good at — indeed, great at — was placating the Bancroft family.

They did so, in part, by paying an enormous dividend — more than the company could really afford.

But they also did so by telling the family, again and again, what a great thing they were doing in protecting the independence of The Wall Street Journal.

Indeed, it was Mr. Phillips who came up with the idea of two classes of stock, which would allow the family to sell some shares and still retain control.

An inept chief executive couldn’t hope for a better deal.

No matter what move Mr. Phillips made, neither the family nor the trustees were ever going to question him. It just wasn’t their style.

[…]To the Bancroft family, Rupert Murdoch has always been the devil — the epitome of the meddling down-market mogul who would wreck the paper if given half a chance.

Or at least that’s what they’ve been taught to believe all these years by Mr. Phillips and Mr. Kann.

And no matter how many promises Mr. Murdoch makes, their opinion is not likely to change.

If they do wind up selling to him, they will do so holding their noses.

There was a time, not so many years ago, when they could have sold to Bloomberg or the Washington Post Company or possibly even The New York Times Company.

But Mr. Kann wouldn’t pursue those deals, and now those buyers are on record as saying they are no longer interested. It’s Rupert or nothing.

Even now, Mr. Kann and Mr. Phillips are trying to persuade the family, one last time, that it’s all about The Journal’s independence — and not their own incompetence or the family’s unwillingness to act as a true steward over its asset.

Last week, Mr. Kann, who did not respond to my phone call, was quoted in The Wall Street Journal as saying how much he admired the family “for taking the position of maintaining Dow Jones as an independent public company.”

On Thursday, I did get Mr. Phillips on the phone. “If they are as determined in their support of The Journal’s independence as they have been in the past, then I think the paper is in good hands,” he said.

Would that it were so.

But it’s not.

“We had to destroy the village in order to save it,” was the famous phrase that came out of the Vietnam War.

With the path they’ve been on, the Bancroft family seems intent on destroying Dow Jones in order to save it.”