by John M. Curtis
(310) 204-8700

Copyright August 2, 2007
All Rights Reserved.

aking the Wall Street Journal's Bancroft family an offer they couldn't refuse, billionaire media mogul Rupert Murdoch landed the world's most prestigious business publication. Founded in 1889 by three journalists Charles Dow, Edward Jones and Charles Bergstresser, Murdoch paid a whopping $5 billion or $60 on 83.8 million shares for the venerable paper, considered the gold standard in business journalism. Only London-based Pearson PLC's Financial Times comes in a distant second. Despite circulation of over 1 million and nearly the same for paid online subscribers, the Journal has consistently lost money in recent years. Blamed on the popularity of the Internet, newspapers have watched ad revenues shrink. Over objections from the Journal's News Room and Editorial staff, the Bancroft family and shareholders couldn't resist Murdoch's extravagant offer.

      When Murdoch first tendered his offer May 2, Dow Jones stock was $33 a share, reflecting a steady decline in value. Offering nearly double demonstrated Murdoch's intent. Despite General Electric's business cable news network CNBC having a contract with the Journal through 2112, Murdoch went ahead with plans to launch the Fox Business Channel Oct 15. He plans to use the Journal's credibility to help promote his business channel. “It's too early to know how or even whether News Corp. ownership might alter priorities or structure at Dow Jones,” the Journal's managing editor Marcus Brauchli wrote an e-mail, reassuring employees. Judging by other Murdoch publications, including the New York Post and Britain's London Times, they reflect his conservative bias. His Fox News Channel is headed by GOP strategist Roger Ailes, former communication director to President George H.W. Bush.

      Resisting the acquisition, members of the Bancroft family and Journal staff expressed concerns whether Murcdoch could refrain from the bias found in his own publications. “It is our most fervent hope that in the years to come, The Wall Street Journal will continue to enjoy, and deserve, the universal admiration and respect which it is held all over the world,” said Bancroft family spokeswoman Leslie Hill, who quit the Board on Tuesday over News Corp.'s acquisition. Unlike U.S. publications, Murdoch's British, Australian and other foreign newspapers support his business and political interests. American newspapers, on the other hand, disguise bias by allowing the paper's highest paid advertisers to influence news and opinion. Murdoch wanted the Journal to promote many of his print and broadcast properties, including the Fox News Channel and new Fox Business Channel

      Editorial and news departments have been heavily influenced by publicly traded corporations. When a conglomerate advertises in broadcast or print outlets, they often ask for editorial or feature news space. While concerns about Murdoch's influence in the Journal are real, the paper has already traded its news and op-ed pages to political leaders and major advertisers. “Readers can rely on this: The same standards of accuracy, fairness and authority will apply to this publication, regardless of ownership,” said Journal publisher Gordon Crovitz, ignoring whether the Journal routinely rewards its sponsors by allocating editorial and news space. Whether the viewing public really believes the Fox News Channel is “fair and balanced,” doesn't affect like-minded views whom routinely tune-in. While known for investigative journalism, the Journal knows its audience: Big business.

      Closing the deal, Murdoch agreed to two provisions: (a) pay the Bancroft family's whopping legal fees and (b) agree to a review board to assure the Journal's independence. A union representing Journal reporters expressed concern that Murdoch would slant stories and editorials in favor of his business interests. Does anyone really believe that other major publications, including the New York and Los Angeles Times, don't skew news stories and editorials to the papers' interests? What the union really worries about are possible cost-cutting efforts to, once again, make the paper profitable. Most major newspapers have had to belt-tighten to face the growing reality that there's an abundance of free news and editorials on the Internet. With less subscribers or viewers, both broadcast and print outlets have had to lower advertising rates, hurting the overall bottom line.

      Murdoch paid a premium for the Wall Street Journal to capitalize on one of the best and most trusted names in the media business. Despite all the protests, buying the Journal gives News Corp. added credibility and helps launch the new Fox Business Channel. With most multinational corporations seeking new markets in a progressively more global economy, Murdoch anticipates growing ad revenues in the Journal's broadcast and print business. While most focus on the Journal's celebrated history of investigative journalism, e.g., exposing the Enron scandal, etc., they've also promoted many bad investments, including showing far too much optimism for the Nasdaq in the years leading up to the tech bubble. Whether or not Murdoch streamlines the Journal, he will inject no more bias than the long history of influence from multinational and domestic corporations

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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