Wednesday, August 8, 2007

Murdoch! Murdoch! Nightmare of Murdoch!

On July 31, after months of negotiation and great wailing and gnashing of teeth in the American press, Keith Rupert Murdoch, legendary boardroom buccaneer and king of tabloid journalism, completed acquisition of The Wall Street Journal, the crown jewel of his News Corporation media empire, for $5 billion – on a per share basis, a handsome runup in the value of the shares of Dow Jones, the Journal’s parent company.

The new boss celebrated his latest acquisition with execs and advisers at News Corp. headquarters in Manhattan by breaking out bottles of Australian Shiraz, a fine full-bodied red-wine narcotic. His employees no doubt used something stronger; Oxy-Contin might not even be enough. There’s been great trepidation on the part of Journal staff; resumes have reportedly been in circulation for weeks, if not months. But with the deal done, Murdoch has exercised his right to tweak that famous excerpt from the Hindu scripture, the Bhagavad-Gita:

“Now I am become Owner, destroyer of standards and reputations.”

From now until the deal is fully consummated, probably some time in early October, the mouthpieces of the media will be circling the wagons and calling their bookies to place bets on how this most prestigious American newspaper will be transformed. If past is prologue, and it often is, the signs are not good.

The cognoscenti of the press wasted no time in discussing the issue. On PBS’s “Charlie Rose,” Ken Auletta, media columnist for The New Yorker, told Rose that the acquisition “gives him enormous power, enormous clout. The Journal will set an agenda the way the [News Corp.-owned] New York Post cannot.” Some of that clout will be evident when Murdoch’s Fox News Business Channel launches, with the assets and resources of the Journal, in more than 31 million homes, on October 15.

Much of the delay in the acquisition was a result of protracted discussions within the Bancroft family, previously the owners of Dow Jones and a clan Auletta told Rose was “as dysfunctional as Paris Hilton’s family.” The battlin' Bancrofts dithered and pulled their chins about selling the Journal for months, with some in the family sincerely expressing reluctance to sell based on principles of Journalistic Integrity and Editorial Independence.

But Andrew Ross Sorkin, a brilliant New York Times business reporter, made a telling point on the Charlie Rose program, one that’s largely flown under the media radar: That, after all the breast-beating from the Bancrofts about maintaining credibility and upholding the Journal’s values and traditions, it all came down to chump change – a relatively small amount of money, given the Bancrofts’ already formidable resources.

Sorkin: “On Sunday night the Denver trust [of the Bancroft family], which was the last holdout trust said, ‘you know what? We want more than sixty bucks. You gotta give us more than sixty bucks. And Rupert’s team said, ‘no, we’re not giving you anything more , and that’s it, and we’re gonna walk and that’s the game.’ And [the Bancrofts] said, ‘well … would you think about paying our bankers and advisory fees?’ … In the end, that’s what put him over the goal line. Forty million dollars!”

The crafty Australian-born magnate was apparently smart to make an offer for Dow Jones north of its market worth right from the start. Murdoch’s $5 billion bid valued each Dow Jones share at $60, well above its trading range in the thirties earlier in the year. Thus, Murdoch froze out the competition. For good.

“You’d think everybody and their brother would want to own the Wall Street Journal,” Sorkin said. “Well, everybody and their brother does want to own the Wall Street Journal, but not at 60 dollars a share. … The idea of not accepting the bid – just think of what would happen: the shares would go down, management would freak out, the staff would be in turmoil and … we would be talking about this for the next two years and Rupert would be back and buying it at half the price. If you think this was a distraction, having said ‘no’ would be worse.”

Meanwhile, concerns about the future of the Journal continue among professional journalists. In today’s Boston Phoenix, for example, Adam Reilly recounts how Murdoch and his minions transformed the Boston Herald, which Murdoch acquired in late 1982:

“Step One was changing the layout from four columns to seven -- better for packing the pages with short, easy-to-read stories. Step Two was changing the paper’s ethos, from the subdued tabloid style cultivated under Hearst to something more authentically Murdochian -- edgy, sensationalistic, and shameless.”

Reilly relates that Les Hinton, an Australian who was assigned to be the Herald’s new managing editor, told another editor that “every page should look like it’s having a nervous breakdown.”

If that’s in any way the marching order for the new Journal, we can kiss any enduring sense of its journalistic gravitas goodbye. There’s a new sheriff in charge at Wall Street’s paper of record.

"I may be evil," Rupert Murdoch said, "but I'm not Pol Pot evil." Lord help us all.
Image credit: Michael Albov, used under terms of Creative Commons Attribution 2.0 license; WSJ logo ©2007 Dow Jones

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