Is Dow Jones Safe In Murdoch's Hands?
The Australian-born media tycoon has seized the Wall Street Journal's parent company. Will he draw the paper downmarket?
It was a spectacular business coup. Rupert Murdoch's News Corp pocketed one of America's best-respected newspapers, the Wall Street Journal, by paying top dollar – $5.6bn – to the Bancroft family for control of its parent company, Dow Jones. But the reaction in the land of capitalism red in tooth and claw has been decidedly sniffy.
The media tycoon's name is synonymous in the city with dumbed-down and opinionated news – a reputation built upon the foundations of the tabloid New York Post and the Fox News cable channel.
In a posting on wsj.com, one reader in Minneapolis lamented: "The Journal will never be the same... Murdoch will turn it into another example of his legendarily low-brow offerings... The craven Bancroft family should slink away in shame."
But is this deal really such a cause for concern. Dow Jones is about to be transferred from one close-knit family with an arcane equity structure to another. Plus, the Bancrofts were as motivated by money as the Murdochs: they agreed to switch their position from guardians to sellers of the family jewels as soon as News Corp offered to pay their $40m advisory fees.
What's more, Murdoch clearly needs to retain the WSJ's integrity and reputation. His attempt to prove there is an attractive business model for Dow Jones – by deploying the content it can provide across the print, television and internet outlets at his command – will be taking place amid intense scrutiny.
He has pledged to invest in Dow Jones's digital operations, bolster the WSJ's Washington bureau and use his formidable resources to invigorate the paper in Europe and Asia, markets in which Dow Jones has made heavy cuts in recent years.
For many, Murdoch is a threat to the whole American journalistic tradition – a barbarian at the gates indeed. But the truth is that he is much more like America's great newspaper proprietors than his critics imagine. He has printers ink in his veins – and perhaps more importantly, he is investing in the newspaper business at a time when others are heading for the hills.
Perhaps, New Yorkers will learn to love him yet.
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