Keep the Street clear
NEWS that the Bancroft family has agreed to sit down with Rupert Murdoch and discuss his offer to purchase the Wall Street Journal has transformed an ominous situation into an alarming possibility.
Well, probably not quite as frightening as the day we learned Kim Jong Il has the bomb, but close ... very close. It could be worse. We might have discovered, for example, that Saddam Hussein had stashed all those missing weapons of mass destruction in a Pasadena storage locker rented to Osama bin Laden.
The consolations of black humor aside, there’s reason for genuine anxiety and serious collective introspection here.
The nearly 40 adult Bancrofts who own a controlling interest in the Journal’s publisher, the 125-year-old Dow Jones Co., previously had declined any discussion of Murdoch’s offer to buy their stock in the publicly traded company, even though he’s offered a premium of nearly 67% on its closing price the day before he made his bid. The company’s stock price has continued to rise since then, though Dow Jones’ competitive prospects as a purveyor of international financial news and information have been complicated by the recent merger of Reuters Group and Thomson Corp. Many believe that the Journal, already one of America’s most widely circulated quality newspapers, must find a readership abroad for its journalism and financial information to prosper further. The need for capital to finance that expansion is one factor that may have led the Bancrofts to decide to hear Murdoch out.
The Australian-born creator of News Corp. long has coveted the Wall Street Journal, which is not simply one of America’s best newspapers but also the publication that sets the standards for international reporting on investments and markets. “Dow Jones and the Wall Street Journal are basically the Coca-Cola of global financial journalism,” newspaper analyst John Morton told Editor & Publisher on Friday. “There’s a huge amount of value in those brand names.”
England’s Financial Times is a formidable and distinguished newspaper, but in their field, the Journal is the acknowledged front-runner for reasons we need not belabor. Murdoch, moreover, is preparing to launch his own financial news channel on cable television to compete with CNBC, and, though the Journal has a contractual link with that network for a few more years, the paper could one day provide both the substance and the cachet that a new, money-oriented channel will require. The Journal’s editorial page, which is rigidly segregated from its news columns, also is one of this country’s leading organs of conservative opinion and, as the guy who bankrolls the Weekly Standard, Murdoch may find the prospect of controlling the paper’s opinion columns an attractive prospect.
For his part, Murdoch has attempted to alleviate anxieties that he would meddle with the Journal’s news pages. Last month, he wrote a letter to the Bancroft family insisting that he is “first and foremost a newspaperman” and that he won’t “apologize for the fact that I always had strong opinions and strong ideas about newspapers; but I have also always respected the independence and integrity of the news organizations with which I am associated.”
Murdoch also offered to set up “an independent, autonomous editorial board” to guarantee the Journal’s independence.
Meanwhile, Peter Chernin, who is president of Murdoch’s News Corp. holding company, said Thursday that the “notion that we would somehow want to buy [the Journal] to change it is counterintuitive.... We want to pay a premium because we believe it is the premier source of news and information in this specific aspect of this society, and we believe the value of that is immeasurable.”
So what’s the problem?
Most Wall Street analysts are hot for the deal. Brian Rogers, the chairman and chief investment officer of T. Rowe Price -- Dow Jones’ largest outside investor -- pretty well summed up the sentiment on the street when he told the Financial Times: “There might be other buyers more palatable to” the Bancrofts, “but who’s to say Rupert Murdoch is all that bad?”
These, of course, are guys who would sell their mother’s kidneys and the kids’ corneas if they could get a good enough premium on yesterday’s closing price. (Banish the Faustian analogy that just popped into your mind, because there is no market in nonexistent souls.)
Rupert Murdoch should not be given control of Dow Jones and the Wall Street Journal for a number of compelling reasons. First of all, whatever his assurances to the contrary, the man has a demonstrated history of intervening in his journalistic and publishing enterprises in ways calculated to serve his other business interests. From his attempted suppression of former Hong Kong Gov. Chris Patten’s memoirs to his oft-reported intervention in other publishing operations he controls to soft-pedal critical reporting on China, Murdoch has used his publications to curry favor and, more important, avoid giving offense to Beijing because he has extensive investments in China and hopes to make far more from its titanic market.
Imagine a man with that sort of predilection controlling this country’s leading purveyor of news and statistics on finance, markets and investing. Then consider that you and your family rely on that information to responsibly invest the money in your 401(k). The first overarching public question is whether we want the nation’s -- indeed, the world’s -- single most important source of financial news in the hands of an owner, like Murdoch, who has a documented history not simply of meddling with his publications but also of meddling for his own financial gain.
That brings us to Murdoch’s baleful and equally demonstrable influence on American journalism, since heaving his rapacious carcass onto our shores as a full-time resident. The late Sen. Daniel Patrick Moynihan used to decry the unthinking tolerance of destructive and heretofore aberrant social and moral behavior because he said it produced what he liked to call “the mainstreaming of deviance.” Because of Murdoch’s Fox News and its success in the ratings, we now accept the blending of news and opinion, of name-calling and unapologetic partisanship, as just another cable television ratings ploy. Thus we have not only the Fox contingent of ranters and distorters, but also the CNN demagogues and faux-populist snarlers, such as Lou Dobbs, Nancy Grace and Glenn Beck.
Similarly, Murdoch’s New York Post has helped create a public appetite for a certain form of vicious and self-serving gossip. It was fairly striking when, a week or so ago, one of the writers for the paper’s popular Page Six gossip column was found to have accepted a cash payment from a New York restaurant owner and then was allowed to continue working. There was a brief ripple of attention, which quickly faded. After all, it was only the Post ... and what can you expect?
Thus the formerly deviant joins the mainstream and the whole social current becomes that much more abrasive and polluted.
Finally, there’s the whole question of whether Americans -- as a democratic polity dependent on honest information for the responsible exercise of their franchise -- want to go on tolerating the further concentration of more and more of their news media into fewer and fewer hands. Murdoch already owns the most-watched broadcast entertainment and cable news networks, along with book publishers and film studios, newspapers and opinion journals -- and every single one of them is coarser and more socially corrosive as a consequence of his proprietorship.
Do we now want him to control our single most important source of information on business and economics?
The Bancroft family will be weighing that question in a social milieu that nowadays treats “leaving money on the table” as a character flaw only slightly more reprehensible than a taste for child pornography. Yet the money being shoved at them across the table is there not because of their talents or because they did anything in particular to earn it.
It’s there because of the diligence, skill and integrity of Dow Jones’ employees. It’s there because of their readers’ loyalty. It’s there because 105 years ago, their ancestor used $130,000 of his wife’s money to buy Dow Jones and because their family has been the company’s steward ever since.
Now they have the opportunity to demonstrate that fortune did not favor their family out of mere caprice.