"I'd love to see the stories you don't publish," my uncle used to say when I was a young reporter for The Wall Street Journal. He was the research partner in a Wall Street boutique and sagacious enough to know that The Journal didn't have room for all the stories we covered each day.
That might just become the worst dilemma confronting readers of The Journal under Rupert Murdoch: what stories aren't in the paper—either because they're cut in the inevitable daily cull, or, more important, never covered at all.
That was clearly the concern of Journal reporters who won a Pulitzer Prize for China coverage, as they publicly opposed the takeover and noted Mr. Murdoch's substantial stake in businesses regulated by the Chinese government. And isn't that at least partly what The Journal's storied editorial writers meant when they recently proclaimed their independence, an independence that could scarcely be doubted thus far?
Independent Coverage at Stake
"Today's news" may seem like a commodity when it's aggregated and touted on any Web site, but any Journal reader knows there's far more than commodity journalism out there. And behind each of those enterprise stories is a stream of judgments and decisions by smart, sophisticated reporters and especially editors who determine what's news and what isn't. For example, who at NBC decides, and on what basis, whether a General Electric (GE) pollution problem will be covered, and how extensively? And who at ABC makes the decisions about coverage of Disney (DIS)? Is it an editor who aspires to move up?
The Journal's vaunted independence has especial value to readers because Dow Jones (DJ) isn't in the broadcasting business. Still highly influential and highly profitable, this federally regulated industry warrants skeptical, arm's-length coverage, and it's not entirely clear that multimedia companies provide that consistently.
Consider the Chicago Tribune's coverage of the Federal Communications Commission debate over whether to relax limits on cross-ownership of newspapers and broadcast stations. Owned by Tribune Co. (TRB), a company heavily invested in both, the Chicago Tribune gave this issue scant coverage—until the FCC announced its favorable decision. Of course, the Tribune could hardly keep such a momentous policy debate a secret; it was being well covered throughout by a certain trustworthy business paper with no broadcast interests.
The Murdoch Journal
As owner of the Fox network, Murdoch's News Corp. (NWS) obviously has a huge stake in how the government regulates broadcasters. And notably, because of court intervention, the sticky issue of relaxing the cross-ownership rules still isn't resolved. Being in the public interest, it cries for thorough, objective coverage. And one can only hope coverage of such matters won't be watered down under new ownership.
Does anyone doubt that the Murdoch Journal, whatever the protective mechanisms erected to honor journalistic independence, will in the end be run by editors who are acceptable to Rupert Murdoch? Could any business journalist who aggressively and fearlessly covers Washington or broadcasting or China earn his stamp of approval?
Not-for-Profit Business News?
It's a shame that Dow Jones and the Bancroft family—like other newspaper owners in similar straits—don't appear to have carefully explored the not-for-profit route. Public broadcasting is superb, well supported by contributions from an appreciative audience. Do we consider it defective because it pays no taxes? Of course not. It produces quality journalism, significantly enhancing our civic life and our democracy.
Aren't newspapers equally important for the same reasons? Isn't The Wall Street Journal, with its formidable coverage of our economy and business, especially valuable to us all, even those who don't read it? Yes—because business and government leaders do, and they heed it. The Journal monitors the world of money, a realm that's vital to everyone. Clearly the paper would be just as valuable, just as influential, under a not-for-profit umbrella, like the Poynter Institute's ownership of the St. Petersburg Times.
Making the Jump
How to convert a business to a not-for-profit isn't obvious, unless the property is so decrepit that the owner simply elects to make a deduction of it, and that's not the case here. A not-for-profit entity, like any corporation, can raise cash by borrowing, and that's exactly what Sam Zell cleverly is doing to acquire Tribune Co. The borrower is an employee stock-ownership plan,, and that's one way to go. True, the reorganized Tribune Co. will carry a staggering $13 billion debt. But the buyout debt is $8 billion, while the remainder was incurred previously, largely to buy back stock in a futile effort to placate restive owners in the Chandler family. Without that gaffe, Tribune's impending burden would be comfortably manageable. By contrast, Dow Jones has no long-term debt.
In effect, a not-for-profit newspaper company operating in the black—and Dow Jones is—would buy its own stock instead of paying taxes. That's a good deal for the paper, its employees, and society, if not for the government.
Looking to The Journal's future under Murdoch, we'll probably see whether it works financially, and that will matter to him and News Corp.'s shareholders. But the rest of us, who benefit from The Journal in ways more important to the commonweal, will never know what malfeasance or shady deal the paper didn't expose. Those disclosures won't appear in the quarterly statement.