Murdoch targets synergies for global holdings
Media Conglomerates: When media tycoon Murdoch takes over the Wall Street Journal, the pressure on quality publications like the New York Times also increases.
Media groups If media tycoon Murdoch acquires the Wall Street Journal, the pressure on quality titles such as the NY Times will also increase. Australian media tycoon Rupert Murdoch's generous offer to acquire the Wall Street Journal (publisher Dow Jones), owned by the Bancroft family of publishers, has caused a great deal of surprise in the USA. But few media observers doubt what the final outcome will be. "No matter what the Bancroft family says, the deal will be done," predicts the New York Times. "The brute force of capital always finds a way."
Murdoch intends to take advantage of the excellent business coverage of the Journal and its parent company Dow Jones for the launch of his new business TV channel in October. "Dow Jones would be an excellent content provider for all its TV channels, there would be a lot of synergies for its global properties," says Dom Serafini, editor-in-chief of industry publication Videoage International. "It would also enable extensive cross-platform deals in terms of advertising."
Although the resistance of the Brancrofts, who control the course of the newspaper, does not seem to have been broken so far, one key aspect speaks in favor of a sale: despite its record circulation of two million, the renowned Wall Street Journal is not a profitable business, which is being observed with a frown in the USA. Under its last boss, Peter Kann, the newspaper lost a considerable amount of advertising, for which the end of the Internet boom in 2001 was responsible. The Journal relies more heavily than other publishers on technology ads and has still not been able to make up for the slump in advertising.
In order to attract more advertisers from the consumer goods industry, the weekend edition was introduced at the end of 2005. Although this has had a positive effect, the really big profits have so far failed to materialize. Dow Jones does not publish any figures on the Journal's profits. "I would say the Journal is borderline in the black," believes newspaper consultant John Morton. "Although some things have improved in recent years, the paper is still in trouble."
The industry reacted all the more astonished to Murdoch's purchase price of five billion dollars. "The fact that we have received an offer of this amount, especially in times of such low newspaper share prices, speaks to the quality and integrity of your work," wrote editor-in-chief Paul Steiger in a memo to the staff, warning: "We should avoid getting caught up in the question of what if."
The main concern in journalistic circles is that the conservative Rupert Murdoch will interfere in the Journal's reporting, despite assurances to the contrary, as has happened with other media in the past. "The fear is that he could extend his influence to the commentary page," Serafini specifies. "But that's pointless because the Wall Street Journal is already very conservative." There is also fear in the corridors of the WSJ of possible budget cuts and the often accompanying curtailment of journalistic resources, which new owners usually use to make their business more profitable.
Meanwhile, the discussion has already moved one step further: "If Dow Jones is sold, the pressure on the New York Times will also be substantial and there will be takeover bids," says Michael Wolff, media critic at Vanity Fair. Just as with Dow Jones, Times shares are listed on the stock exchange, but the Sulzberger publishing family has the decisive votes on the boards.
Wolff believes that the pressure from shareholders could become so great that the family will have to give in. "The idea that you can take a company public and still run it like a private company is currently being increasingly questioned. This certainly applies to the New York Times."
Gerti Schön, New York
The News Corporation media empire (selection)
Newspapers/Magazines London Times, Sunday Times, Gemstar/TV Guide, Weekly Standard, The Sun, New York Post, The Australian
TV channels Fox Broadcasting, National Geographic, FX, BskyB, DirecTV, Sky Italia
Others Harper Collins, 20th Century Fox, Fox Searchlight, MySpace.com, AmericanIdol.com
"Murdoch always gets what he wants"
Murdoch biographer Jim Tucille
("Murdoch: Creator of a Worldwide Media Empire") tells us what he thinks about the media tycoon's plans.
WW: What do you think of Murdoch's plan to buy Dow Jones?
Jim Tucille: Murdoch is known for offering too much money for his new acquisitions, which are profitable in the long term. He has always claimed not to interfere in the reporting of a new medium, but that is not entirely true. The New York Post, for example, was a left-leaning newspaper before Murdoch bought it, and now it is extremely conservative. If he takes over the Wall Street Journal, its content will probably be even more pro-business.
WW: Do you think he will be able to convince the Bancroft family?
Jim Tucille: Yes, I think he will be successful in the end. He's putting in a lot of effort and offering a lot of money. He can be very charming and will say that nothing will change in terms of reporting. Murdoch always gets what he wants in the end.
WW: How would you describe his personality?
Jim Tucille: He is very controlled and always keeps himself under control. When I wrote my book, he put me off for six months and in the meantime made sure that I wasn't pursuing any particular goal with it. But once he agreed, he opened a lot of doors for me. It's hard to get anything out of him, he's shrewd and cunning, and all his loyalties lie with his empire.
Interview: Gerti Schön
Murdoch intends to take advantage of the excellent business coverage of the Journal and its parent company Dow Jones for the launch of his new business TV channel in October. "Dow Jones would be an excellent content provider for all its TV channels, there would be a lot of synergies for its global properties," says Dom Serafini, editor-in-chief of industry publication Videoage International. "It would also enable extensive cross-platform deals in terms of advertising."
Although the resistance of the Brancrofts, who control the course of the newspaper, does not seem to have been broken so far, one key aspect speaks in favor of a sale: despite its record circulation of two million, the renowned Wall Street Journal is not a profitable business, which is being observed with a frown in the USA. Under its last boss, Peter Kann, the newspaper lost a considerable amount of advertising, for which the end of the Internet boom in 2001 was responsible. The Journal relies more heavily than other publishers on technology ads and has still not been able to make up for the slump in advertising.
In order to attract more advertisers from the consumer goods industry, the weekend edition was introduced at the end of 2005. Although this has had a positive effect, the really big profits have so far failed to materialize. Dow Jones does not publish any figures on the Journal's profits. "I would say the Journal is borderline in the black," believes newspaper consultant John Morton. "Although some things have improved in recent years, the paper is still in trouble."
The industry reacted all the more astonished to Murdoch's purchase price of five billion dollars. "The fact that we have received an offer of this amount, especially in times of such low newspaper share prices, speaks to the quality and integrity of your work," wrote editor-in-chief Paul Steiger in a memo to the staff, warning: "We should avoid getting caught up in the question of what if."
The main concern in journalistic circles is that the conservative Rupert Murdoch will interfere in the Journal's reporting, despite assurances to the contrary, as has happened with other media in the past. "The fear is that he could extend his influence to the commentary page," Serafini specifies. "But that's pointless because the Wall Street Journal is already very conservative." There is also fear in the corridors of the WSJ of possible budget cuts and the often accompanying curtailment of journalistic resources, which new owners usually use to make their business more profitable.
Meanwhile, the discussion has already moved one step further: "If Dow Jones is sold, the pressure on the New York Times will also be substantial and there will be takeover bids," says Michael Wolff, media critic at Vanity Fair. Just as with Dow Jones, Times shares are listed on the stock exchange, but the Sulzberger publishing family has the decisive votes on the boards.
Wolff believes that the pressure from shareholders could become so great that the family will have to give in. "The idea that you can take a company public and still run it like a private company is currently being increasingly questioned. This certainly applies to the New York Times."
Gerti Schön, New York
The News Corporation media empire (selection)
Newspapers/Magazines London Times, Sunday Times, Gemstar/TV Guide, Weekly Standard, The Sun, New York Post, The Australian
TV channels Fox Broadcasting, National Geographic, FX, BskyB, DirecTV, Sky Italia
Others Harper Collins, 20th Century Fox, Fox Searchlight, MySpace.com, AmericanIdol.com
"Murdoch always gets what he wants"
Murdoch biographer Jim Tucille
("Murdoch: Creator of a Worldwide Media Empire") tells us what he thinks about the media tycoon's plans.
WW: What do you think of Murdoch's plan to buy Dow Jones?
Jim Tucille: Murdoch is known for offering too much money for his new acquisitions, which are profitable in the long term. He has always claimed not to interfere in the reporting of a new medium, but that is not entirely true. The New York Post, for example, was a left-leaning newspaper before Murdoch bought it, and now it is extremely conservative. If he takes over the Wall Street Journal, its content will probably be even more pro-business.
WW: Do you think he will be able to convince the Bancroft family?
Jim Tucille: Yes, I think he will be successful in the end. He's putting in a lot of effort and offering a lot of money. He can be very charming and will say that nothing will change in terms of reporting. Murdoch always gets what he wants in the end.
WW: How would you describe his personality?
Jim Tucille: He is very controlled and always keeps himself under control. When I wrote my book, he put me off for six months and in the meantime made sure that I wasn't pursuing any particular goal with it. But once he agreed, he opened a lot of doors for me. It's hard to get anything out of him, he's shrewd and cunning, and all his loyalties lie with his empire.
Interview: Gerti Schön
