With Rupert Murdoch's deal for Dow Jones nearly complete, online pundits weigh in on the future of The Wall Street Journal and the media business
The news that News Corp. (NWS) Chairman Rupert Murdoch has apparently succeeded in his quest to buy The Wall Street Journal publisher Dow Jones (DJ) spurred a torrent of comment online, where market watchers, journalists, media critics, and political pundits weighed in on the future of one of the biggest names in business news.
"Wondering what that keening, mournful wail you just heard coming from 200 Liberty Street was?" asked Huffington Post media blogger Rachel Sklar, referencing the location of The Wall Street Journal's lower Manhattan headquarters. "At long last, push has finally come to shove, and the unholy union of Dow Jones and News Corp. has been made."
New Competition for Big Media
Even though Murdoch's $60-per-share offer represented an enormous premium for Dow Jones shareholders, he was right to value the company's assets as high as he did, wrote former Knight Ridder executive Ken Doctor at his blog, Content Bridges. "Murdoch's Dow Jones vision is right-on," Doctor wrote. "It's the idea of a global business news and data business delivered to the laptops, desktops, phones, PDAs and TV monitors of everyone who wants in on capitalism around the globe." The lesson for others, according to Doctor: "Publishers better value their own assets before interlopers do."
Could Murdoch's successful bid for Dow Jones spell trouble for other media companies? Doctor thinks so, especially for those that share the two-tier stock structure that allowed the Bancroft family to maintain control of the company. The New York Times Co. (NYT) and the Washington Post Co. (WPO) fall into that category. At BloggingStocks, Jonathan Berr saw the possibility that other companies in the news business might also be vulnerable. "Since Dow Jones appears to have gotten a ridiculously high price for its company, Wall Street will wonder why small media companies such as the New York Times Co., E.W. Scripps (SSP), Martha Stewart Living Omnimedia (MSO) and Gannett (GCI) can't do the same," wrote Berr.
Dow Jones' journalists were clearly unhappy about the deal. Popular news industry blogger Jim Romenesko posted a memo from the union representing more than 2,000 Dow Jones employees blasting the company's sale on the grounds that News Corp. ownership would "irreparably damage the quality and independence of The Wall Street Journal and all Dow Jones publications." Their well-publicized discontent led science journalist and author Jim Schnabel to speculate in his eponymous blog about the consequence of mass resignations. "The transference of value, from the Journal brand to the new brand, would be transparent. Murdoch would be left holding an empty bag," he wrote. But chances of that are slim, he added.
News Corp.'s acquisition of The Wall Street Journal and Dow Jones' other news properties led to some speculation about how Pearson, the British media giant that owns the Financial Times and The Economist, might react. Noting that the company has already said that it's looking to join forces with another big media player to increase its visibility, Techdirt's Joe Weisenthal suggested the Financial Times might consider teaming up with CNBC if Murdoch ends The Wall Street Journal's partnership with the financial news channel ahead of the long-awaited October launch of the Fox Business Network. Pearson should also take advantage of the fact that most of the Journal's online content is only available to subscribers, Weisenthal said. "Were the Financial Times to take down this wall, opening up its best content to the public, it wouldn't be hard to imagine the paper usurping some of the Journal's influence," Weisenthal wrote.
The Journal's role in promoting and providing content for the Fox Business Network may well help it weather some of the abuse Murdoch's critics expect it to take under News Corp.'s ownership, according to online finance site theflyonthewall.com's Larry Ramer. "Murdoch wants the Journal to lend credibility to the Fox business news channel, so it doesn't seem logical that he would seek to diminish the Journal's prestige in any way," Ramer wrote. "People who have been worried that Murdoch would try to make the Journal's news pages reflect his right-wing political views probably do not have to be concerned."
Whither Wall Street Journalism?
Murdoch's political foes didn't see it that way. "Murdoch will, inevitably, destroy the jewel of American journalism that the news pages of the Journal have long been," wrote Eric Alterman, the media columnist for The Nation, a left-of-center political journal, in his blog. "The purchase makes no sense whatever if he doesn't, and nothing, literally nothing, in his past indicates that he cares in the slightest bit for the journalistic quality of anything he owns," he continued. The deal isn't without its upside for liberals, Alterman said, because any damage Murdoch does to the reputation of the Journal's news coverage will inevitably weaken the paper's strongly conservative editorial page.
Other prominent liberal bloggers were more sanguine, however. "The WSJ's editorial page has been insane for years. And there's going to be a market for good business reporting. If Murdoch doesn't provide it, someone else will," wrote Duncan Black, aka Atrios.
There was plenty of nonideological—albeit highly sarcastic—concern for the future of the Journal, as well. Under the headline "Sneak Peak: Tomorrow's Wall Street Journal Cover," former Merrill Lynch (MER) analyst Henry Blodgett posted a short item about the misadventures of Hollywood starlet Lindsay Lohan. In a separate post, Blodgett speculated that Bancroft family reunions "might be awkward for a while, especially when Murdoch starts publishing models-in-bikinis on the WSJ cover."
A Last-Ditch Effort
Meanwhile, at least one of Dow Jones' other potential suitors was still trying to snatch the company from Murdoch's grasp. Brad Greenspan, a co-founder of MySpace, the social-networking site now owned by News Corp., offered to invest $600 million in joint ventures with Dow Jones, according to a press release. The latest in several attempts by Greenspan to play Dow Jones' white knight, the move elicited criticism from Mark Lacter, a former Los Angeles Business Journal editor blogging at LA Observed. "Now, the former co-founder of the company that developed MySpace is simply looking foolish—almost sad," Lacter wrote.