Before last Tuesday, if Rupert Murdoch wanted to get under The New York Times' skin, his best option was to take a swipe at the Sulzbergers in the well-read gossip and business pages of the New York Post. Now, with the conquest of Wall Street Journal-owner Dow Jones he can take a full-frontal approach, possibly setting up a real smackdown for the title of "paper of record," the somewhat nebulous journalistic crown worn by The Times for decades.
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The Journal has been the nation's most important business read, but its coverage of the national political scene and international affairs have been scaled back thanks to general business woes. In the months leading up to the deal, a big part of Mr. Murdoch's push to sell his vision for a News Corp.-owned Dow Jones was to promise to invest some of his coffers to get more general news in the Journal.
The Times, despite a dominant position in many areas of reporting, is going in the opposite direction in terms of investing in editorial firepower. Management is paring back a cost structure that's looking increasingly unwieldy in a continually weak advertising environment for newspapers. In its quarterly conference call late last month, the Times reported improved profits, thanks to the sale of some TV stations, but said advertising had declined 7%. Similarly, the Washington Post Co., the Times main rival on national issues, reported a 13% drop in quarterly profits last week thanks to declining advertising at the flagship paper.
"The Wall Street Journal has been a good competitor and we expect it will continue to be," a New York Times spokeswoman said, declining to comment any further.
Mr. Murdoch's success will depend heavily on whether he can maintain the Journal's high level of credibility. That will mean avoiding any temptation to bend the paper's news-gathering approach to serve his political will.
While he's said little about his plans for the Wall Street Journal and the rest of Dow Jones' portfolio, Mr. Murdoch's track record makes a few things clear: He is a cutthroat competitor unafraid of using bloody price cuts to gain share (as he has with London's Times and at the New York Post) and his salespeople tend to be among the most aggressive and creative in the industry.
If Mr. Murdoch does take the Journal in a more consumer-oriented direction, it'll likely result in a national newspaper for the wealthy right that would counterbalance The New York Times on the left and Gannett Co.'s USA Today in the center. But Ed Atorino, a veteran newspaper analyst at Benchmark Co., said he sees it as unlikely that Mr. Murdoch would be able to cause the same sort of turmoil among those players as he had in the cable-news arena. "The truth is Dow Jones had been pushing pretty hard in that direction already," Mr. Atorino said. "Can he light a fire under the sales guys? Sure, but I don't think the Journal was broken. There's nothing he needs to fix."
A push by Mr. Murdoch in a more consumer-oriented direction, however, could create an opportunity for Pearson's Financial Times to assert itself as a true, independent business source, particularly if Mr. Murdoch's Journal suffers a misstep that causes readers and advertisers to question its coverage.
A new fight
An FT spokeswoman didn't respond to interview requests, but executives there have said in the past they expected their niche approach to help differentiate them from Mr. Murdoch's mass-market strategy. In a note to investors, Citigroup said that "at the very least" the FT needs to increase marketing spending to compete with what will likely be a more aggressive Journal abroad. The FT's circulation, advertising and profit have climbed of late, but it's unclear whether executives at Pearson -- who have been called upon to sell the FT -- will make the investment to take on Mr. Murdoch. In April, a new ad campaign, "We are in Financial Times," was launched.
Meanwhile, another kind of fight will begin between General Electric Co.'s CNBC and News Corp.'s soon-to-be-launched Fox Business Network. The Fox Business cable channel launches Oct. 16. One sticky aspect to the Dow Jones deal is that The Wall Street Journal and CNBC have a long-standing editorial-sharing agreement that runs through 2012. That prevents Mr. Murdoch from using assets of his new prize as fully as he might like.
"We love the relationship and the quality we've had for the last 10 years," a CNBC spokesman said. "We hope the quality and expect the relationship to continue for the next five years." But longtime media analyst Lauren Rich Fine notes that "having resources and being able to marshal them are two very different things. The Wall Street Journal had deals with CNBC so the reporters are pretty well trained. But just being commonly owned won't make them all trust each other. GE/NBC brings a lot to the table as well."
CNBC last week launched an ad campaign emphasizing the high level of business executives that watch its 24-hour news, including Sirius Satellite Radio's Mel Karmazin, Bob Johnson of RLJ Companies, publisher of Black Enterprise, and Southwest Airlines' Herb Kelleher.
"We take all competition seriously," the CNBC spokesman said. "We've had competition in the past. We have competition now, with other TV networks, the web, newspapers."
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Contributing: Nat Ives