EIGHTH IN A SERIES

Murdoch Lifer Mans Main Street Journal

Can Dow Jones CEO Les Hinton Ride Out Newspapers' 'Worst Year'?

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NEW YORK (AdAge.com) -- It's already been eight months since Rupert Murdoch plucked Les Hinton from London to run Dow Jones and The Wall Street Journal, and Mr. Hinton does not like to dawdle. "In media and media-executive jobs, the ponderous do not survive," he told Advertising Age.

Les Hinton started out buying sandwiches for Rupert at 15; at 64 he runs Murdoch's Dow Jones.
Les Hinton started out buying sandwiches for Rupert at 15; at 64 he runs Murdoch's Dow Jones. Credit: Scott Gries

But to appreciate his moves -- not to mention his relationship with Mr. Murdoch, whose $5.6 billion acquisition of Dow Jones last December shook the industry -- we have to go back to 1959. Les Hinton was a 15-year-old son of working-class Brits looking for a new life in Australia. He walked into a little afternoon paper in Adelaide, asked for office work and got it. "Then I was sort of buying Rupert his sandwiches for lunch," he recalled.

As it happened, The Adelaide News was young Mr. Murdoch's first and only daily paper. Mr. Hinton has served him in different capacities ever since, with the exception of a couple of years in England working for United Press International and then for a paper again. "Rupert bought the newspaper," Mr. Hinton said. "At that point I stopped running."

The whole world has more or less stopped running from Mr. Murdoch, whose News Corp. controls media properties including 20th Century Fox, MySpace, Fox Broadcasting, Fox News, HarperCollins, Sky Italia, BSkyB and News Outdoor. It also owns a ton of newspapers, led by a new flagship in the Journal.

What's the future for newspapers?
Eighth in a series
That affinity for newspapers stands out in 2008, which a Goldman Sachs analyst just pegged as perhaps the industry's worst year yet. It is positively striking amid quickening revenue declines all around the business, with no sign that the beneficiary -- digital media -- will ever give that money back. Mr. Murdoch is considered a media visionary, responsible for a relentless rise in News Corp. revenue and influence, but even News Corp. shares are scraping their 52-week lows. The powerful Wall Street Journal, with paid circulation edging up instead of falling, is an envy of the industry, but it has challenges too -- enough that the Bancroft family wondered, fruitlessly, just what they would do if they rejected Mr. Murdoch and kept the thing themselves.

Murdochian influence?
Now we will see how much the new-management Journal still depends on Wall Street, for example, where the credit crunch, plunging valuations and layoffs have combined into a driving downdraft. Critics are watching for any sign of Murdochian business or politics undermining the Journal's integrity. And the paper's expansion into news beyond business looks like dilution to some longtime readers.

Despite its impressive market position, the Bancrofts had not given the Journal the resources it deserved, according to Mr. Hinton. "The paper had been insufficiently supported," he said. "For us it's getting across the message that we are -- at a time when everyone else is pulling back -- that we are in fact investing in the newspaper. Because we think there's real opportunity there."

The closest prospects include WSJ, the glossy magazine in final development ahead of a Sept. 6 debut. The website will undergo a serious relaunch this fall. And international expansion from China to Eastern Europe looks choice to the new owners. "The thing all these places have in common," Mr. Hinton said, "is the need for intelligent, trusted information on which they can act."

Observers even ask whether "Wall Street" might fall from the Journal's name at some point as its horizons widen. "That has been speculated about but never been discussed in this building," Mr. Hinton said. "It's never been discussed."

Then there's this idea about directly challenging The New York Times. "I've read the Journal for 30 years -- more," Mr. Hinton said. "When a big story happened, you'd immediately feel the need to buy another paper. Well, if there's a major earthquake in China, as a recent example, our view is that you should not need to buy another newspaper to know what's going on." As the Journal becomes more comprehensive, Mr. Hinton can imagine 30,000 or 40,000 people deciding every year that it's the only newspaper they need. He can see elites, that is to say, keeping the Journal but quitting the Times.

'Astute political operator'
That may sound audacious, but Mr. Hinton is no blustery salesman. He was a longtime reporter before switching to the business side. During our talk in his office, he spoke quietly but quickly, occasionally in very fast bursts, happy to demur instead of dominating and selling. "He doesn't throw the histrionics in the classic newspaper way," said a veteran editor in the U.K. "He's very popular. He's been very successful here. He's an astute political operator."

CEO at a glance
Title: CEO of Dow Jones, publisher of The Wall Street Journal
Born: Feb. 19, 1944, in Bootle, England
Raised: In countries including Libya, Egypt, Ethiopia, Singapore and Australia -- his father was a chef for the Royal Army
First job: 15-year-old office boy for Rupert Murdoch's Adelaide (Australia) News
Citizenship: United States, as of 1986
Former posts: Executive chairman of News International, president-CEO of News America Publishing, chairman-CEO of Fox Television Stations, correspondent for News Corp. newspapers
Lives: New York
Children: Five, all grown
At age 64, Mr. Hinton has seen a lot of media machinations pass by. He has been called one of Mr. Murdoch's "most important lieutenants" as well as "Rupert Murdoch's London hit man." Last summer The Guardian ranked Mr. Hinton 25th on its list of the U.K.'s most powerful people in media, ahead of WPP Chief Executive Martin Sorrell.

For all that, he has a certain subtlety and dexterity about him. Mr. Hinton defended newspapers against charges of invading privacy when he was chairman of the code committee at the Press Complaints Commission. "Is it time to clean up you act?" demanded one Member of Parliament during a hearing. "Clean up our act?" Mr. Hinton retorted. "Are you saying we're dirty?" A few years after rejecting that critique, however, Mr. Hinton decided to ban paparazzi shots of Prince William's girlfriend from News International papers.

He was still executive chairman of News International then, responsible for The Sun, News of the World, The Times and The Sunday Times. They saw 100 editorial posts disappear last summer. "This is necessary," Mr. Hinton explained to the Daily Mail, "because newspaper revenues are coming under pressure at a time when other costs are rising, and we are also investing in digital media."

Since getting to Dow Jones, Mr. Hinton has rethought his initial enthusiasm to grow the Journal Online by dropping its pay wall. "It was hasty of us," Mr. Hinton said.

Fuzzy math
Although he might sympathize with the get-'er-done ethos at Sam Zell's Tribune Co., Mr. Hinton is not impressed with the Zell idea to trim news holes until ad space and edit space are equal. "Mathematical equations do not work in media," he said. What works in media is: If the reader and the advertiser don't like what they're seeing, then they ain't going to be coming back.

Asked what keeps him up at night now, Mr. Hinton quickly responds: job security. "I've always been in this situation, working in very competitive businesses," he said. "Media above all is relentlessly competitive and uncertain."

It's just as well, then, that the ad-sales team seems to have found a new gear. "The ad-sales team is the best I've ever seen at The Wall Street Journal," said George Janson, managing partner and director of print at Mediaedge:cia, which uses the Journal for clients including Accenture, Chevron and Citibank. "They're much more creative and customer-centric. We view each other as partners. There's a great deal of trust on both sides. Everyone is more willing to let each other under the hood of the car."

For that Mr. Hinton credits Michael Rooney, the Dow Jones chief revenue officer poached from ESPN seven months before News Corp. took over. "He's just changed the game there," Mr. Hinton said.

The Journal's unique place in American business has also helped it escape much of the newspaper industry's carnage elsewhere. "The Journal is not entirely in the category of general-interest newspapers," he said, "because it is a hybrid." It is a business tool and, increasingly, a guide to high-end living outside the office or investing. So perhaps the biggest question remaining for the Journal centers on its hybrid composition. The mix is going to have to be just right. Too much business, and News Corp.'s grander ambitions fall away. Too much of the rest, and the Journal becomes just another big paper. But Mr. Hinton and Mr. Murdoch could hardly have predicted their paths since they met in Adelaide; we'll have to see what road they take from Wall Street.

Les Hinton speaks

Les Hinton sat down with Ad Age for his first on-the-record profile since arriving at The Wall Street Journal from London. He doesn't often speak with the press at all, in fact, but is worth hearing when he does.

ON NEWSPAPERS' COMPETITION: "There is another important contest that people don't seem to address, or at least here, and that is boring vs. interesting. That's the contest. You can be boring in any media and you're not going to get attention. And if you're boring in newspapers, you sure as hell aren't going to get any attention these days."

ON NEWSPAPER WARS IN ENGLAND: "There's a whole spectrum, but they all compete very intensely. No decent journalist isn't a worrying insomniac in Britain, because you're afraid of losing."

ON BROADENING THE JOURNAL'S COVERAGE: "I've read the Journal for 30 years -- more. When a big story happened, you'd immediately feel the need to buy another paper. Well, if there's a major earthquake in China, as a recent example, our view is that you should not need to buy another newspaper to know what's going on."

WHAT KEEPS HIM UP AT NIGHT: "Job security, I guess. I've always been in this situation, working in very competitive businesses. Media above all is relentlessly competitive and uncertain. ... In media and media-executive jobs, the ponderous do not survive."

ON THE FINANCIAL MARKETS' TURMOIL: "Obviously with the institutional, finance, advertising and banks, we've suffered as a consequence of the unpleasantness of the past seven or eight months."

ON TRIBUNE'S MOVE TO A 50/50 AD-EDITORIAL SPLIT: "Mathematical equations do not work in media. What works in media is: If the reader and the advertiser don't like what they're seeing, then they ain't going to be coming back. If an advertiser thinks that a newspaper is too crowded with advertising, they ain't coming back."

WHY THEY DROPPED THE IDEA OF MAKING WSJ.COM FREE: "It was hasty of us. You've got to understand that the value of what the Journal does at its heart is something that people are more than happy to pay for, because it powers their business, it powers their careers, it powers their jobs."

HIS BIGGEST SURPRISE AFTER NEWS CORP. BID FOR DOW JONES: "What was I guess not anticipated on the scale that it existed was the level of purported indignation or hostility to our ownership."

HIS BIGGEST SURPRISE AFTER TAKING OVER: "I've had lots of meetings and I've had lots of tough questions and I've listened to a lot of points of view about 'What are you going to do?' and doubts. I do this all over the world. But in the end, there was an embrace of us that I thought was unreasonable to expect."
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