News Corp. Chairman Rupert Murdoch moves closer to taking over Dow Jones.
Dow Jones Denies Report of a Murdoch Deal
Says Report Is Not True and That Negotiations Continue
After Five Hours, Murdoch and Bancrofts Agree to Keep TalkingBancroft Family to Meet With Rupert Murdoch to Discuss Dow Jones Bid
Dow Jones Employees Union, Meanwhile, Looks for Own Bidder
Cites 'Evolving Competitive Environment' as Challenge to Remaining Independent
"If people are going to be concerned about the quality and independence of The Journal, that plays quite well for us," said Paul Rossi, publisher for North America at The Economist. "Do readers look to The Wall Street Journal in a different light, do they start to look for different sources? That could be an opportunity for us. Do advertisers think the market's changed somehow? That could be an opportunity."
Paying for the integrity
To be clear, Mr. Rossi and many others don't believe that Mr. Murdoch would sink $5 billion into buying Dow Jones and then proceed to hurt its sterling reputation in any way. "A large part of the value that he's paying a lot of money for is in the integrity and the quality of the brand," Mr. Rossi said. "It's hard to imagine he would do anything to compromise that." Media buyers have previously expressed similar views to Advertising Age.
The Wall Street Journal reported today that News Corp. had reached a tentative deal to buy Dow Jones. No deal can become final unless first the full Dow Jones board and then the company's controlling Bancroft family each agree to its terms.
The board is expected to sign off; the family is less certain but still likely to accede. The Bancrofts have been wavering back and forth since Dow Jones revealed on May 1 that it had received an offer from News Corp. Representatives for News Corp. and Dow Jones declined to comment on today's report of a tentative agreement.
Relies on automakers
On the advertising front, the Wall Street Journal has struggled a bit in recent years. A glance at its 10 biggest advertisers in the last four years reveals a heavy dependence on automakers such as Ford, Toyota and General Motors, as well as telecom giants Sprint, Verizon and AT&T. IBM, its No. 1 advertiser in 2004 and Dell, No. 5 in '04, have dropped off the top-10 list completely in 2007. It remains to be seen how its advertising mix might change under new ownership, or whether rivals would take direct aim at grabbing the Journal's share of ad dollars.
And consider the measured response from The Financial Times, which has been chomping at the bit to expand in the U.S. market. Executives there were not available for comment this morning, according to a spokeswoman, but she provided a statement implying that a lot depends on precisely what News Corp. does with The Journal.
"It's unclear what the strategy of The Wall Street Journal would be under a change of ownership," she said. "What we do know is that the FT's strategy is paying off well and we are pleased with our performance. Murdoch's bid highlights the real value of business journalism and its strong position in the market."
Hits keep coming
The thing is, Mr. Murdoch could move to the moon and still not squash every concern about his influence. It's all about perception, and the hits on his integrity keep coming. Yesterday, in the most recent example, a member of the Ottaway clan told The New York Observer about a political prisoner he knew whose long detention in China was never reported by local Murdoch media.
"At the time, you couldn't find out that he was in jail if you didn't read the foreign press," James Ottaway said. "You couldn't find out from a Murdoch outlet in China, Star TV, which is completely censored for any news that would disturb the Chinese government. They just parrot the Chinese communist government propaganda line."
But one business-side executive at another media outlet said perception goes both ways. "We know there's going to be some level of editorial protection, whether it's hollow or real," the executive said. "There will be a public sense that the editorial will be protected. It's going to be an easy thing for The Journal to dismiss. It would be an opportunity if Murdoch were going to be able to go in and take immediate control of the editorial."
The executive asked to remain anonymous to avoid publicly contradicting the editorial staff there, which believes Mr. Murdoch will damage The Journal's reporting and reputation.