So now what? Since the News Corporation’s offer for Dow Jones & Company was made public three months ago, Rupert Murdoch’s business career, character and motives have been dissected in an effort to predict what he might do as the owner of The Wall Street Journal.
Despite how long Murdoch has wanted The Journal, he may not have a set playbook, according to interviews and more recent conversations with several people in Murdoch’s camp, who spoke on the condition they not be identified.
“There’s a very low probability that there’s a grand plan,” said one person close to Murdoch.
But based on his history, there is little doubt Murdoch will directly aim at luring both readers and advertising away from The New York Times and The Financial Times, The Journal’s closest rivals. His strategy will probably include aggressively undercutting advertising and investing heavily in editorial content — particularly in Washington and international news — absorbing losses at first to win the longer-term war.
At its most ambitious, Murdoch’s vision for Dow Jones would establish The Journal as the rival to The Times in setting the daily news agenda of the country.
The vision has a business corollary: by broadening The Journal’s influence beyond pure business readers, Murdoch wants to reposition it as not just the world’s leading financial newspaper, but the world’s leading business journalism source for consumers.
The paper has already tried this with softer service features and its Saturday edition. Reorienting the newspaper further for consumers would fit with two other aspirations Murdoch has. One is to build his nascent Fox Business Network, which begins in 30 million United States homes this October, into a viable contender with Bloomberg Television and CNBC, which have much larger subscriber bases both at home and abroad.
Rupert Murdoch leaves the NewsCorp Building after a vote by his board to approve the purchase of the Dow Jones Company at his Headquarters in New York Tuesday, 31 July. (AP Photo/David Karp)
The Journal already has a deal to provide news content exclusively to CNBC, an agreement that the News Corporation discovered is ironclad until 2012. Any move to tie The Journal to the new Fox business channel will require disentanglement. In the meantime, the business channel, which is scheduled to begin operation on Oct. 15 under the direction of the Fox News chief executive and chairman, Roger Ailes, is being readied on the presumption that it is a stand-alone business.
Murdoch’s second and overarching vision is to resurrect the newspaper industry by integrating print and video online and building brands around the world.
Part of that involves tapping into Dow Jones’s Web properties — it owns not just The Journal but also the investing weekly Barron’s, Dow Jones Newswires and the consumer-focused Web service MarketWatch.com — to create an online platform for all of the company’s newsgathering operations around the world. Another part would be using the company’s Fox and Sky News video outlets as sources of video content on the new sites.
Murdoch has shown in the past that he is willing to experiment, even knock over some sacred cows. In an interview with The Times earlier this year, Murdoch mused aloud about The Journal, saying, for instance, that he did not have time to read longer articles during the week and might like to swap out the paper’s Pursuits section on Saturdays with a glossy magazine. More recently, he told Time magazine that he was not sure about the offbeat front-page stories known internally as “A-Heds” that are a plum for reporters to write.
A more immediate change might be felt on the Web side, where The Journal has stood out among newspapers by commanding more than 900,000 paid subscribers.
Executives at the News Corporation are keen to explore whether more of that content ought to be offered free online to increase the audience and attract advertising, while keeping subscribers by offering more premium services. A more open WSJ.com would be able to attract more advertising, but also potentially distribute that advertising across the News Corporation’s online footprint.
Murdoch’s purchase could mean more immediate changes on the business side of Dow Jones. When he repurchased The New York Post in 1993, he focused on raising the paper’s circulation by cutting the cover price of the paper several times and handing out copies free.
“If he hadn’t come in, there wouldn’t have been a New York Post,” said Jerry Fragetti, senior vice president for media and operations at Newspaper National Network, who worked as chief financial officer of The Post in the 1980s and as an executive for the News Corporation in the early 1990s.
Murdoch believed that expanding the readership would allow him to take away advertisers from The New York Times and The Daily News. (He fought hard for readers on the news side, as well, turning the paper into a gossipy must-read for people on Wall Street, in fashion and in the media business.)
And as The Post grew in circulation, Murdoch did not always increase the price of ads in the paper, say advertising executives who bought newspaper ads in the 1990s.
Advertising executives say The Post pursues ad sales as aggressively as Murdoch has pursued a purchase of Dow Jones. The Post’s advertising department started offering more creative packaging of ads, like opportunities for advertisers in the paper to also be involved in events and promotions, and featured in fliers in the paper, said Peter Gardiner, chief media officer at Deutsch, an advertising agency that is part of the Interpublic Group of Companies.
The paper’s advertising team is still known to be one of the more persistent in the newspaper business.
“The DNA of the people they hire tends to be a little higher octane in terms of aggressiveness and energy,” said Jason E. Klein, president and chief executive of Newspaper National Network, which sells ads on behalf of a variety of newspapers across the country.
“They’re kind of standouts in terms of how hungry they are, which I think for some people is actually quite refreshing,” Klein said.
Several ad executives said it might be appealing to have a one-stop place to buy ads in The Wall Street Journal, its Web site and the News Corporation’s television network about business.
“I want to go nuts on that channel,” Gardiner of Deutsch said.
Murdoch absorbed heavy start-up costs when he introduced the Fox News Channel in 1996, entering a market where critics said there was no room for a new entrant. While his rivals complain that Murdoch has succeeded through flash, tone and slant, today the network is profitable and has overtaken CNN in the ratings.
When it comes to his newspapers, he can be especially deep-pocketed and patient, running up considerable losses for years so long as other branches of his media empire are churning out enough profits.
The Australian, a national newspaper that Murdoch founded in 1964, took more than two decades to record its first profit. The Times of London is expected by News Corporation executives to make a profit next year, its first since it was acquired in 1982. The New York Post has also lost money since the company acquired it for the second time in 1993.
Over all, despite the losses at these high-profile titles, the company’s 110 newspapers, anchored by Murdoch’s money-spinning tabloids in Britain and Australia, produced solid profit margins of nearly 14 percent in the nine months that ended March 31, far higher than The Journal’s margins in the low single digits.
With both The Times of London and The Post, Murdoch engaged in long cover price wars with their chief competitors, The Daily Telegraph in London and The Daily News in New York, which helped increase the sales of both Murdoch titles markedly. Murdoch has not said whether he would try to change the price of The Journal, which recently increased its newsstand price, as did The New York Times and The Financial Times.
And while changes atop Dow Jones may not be imminent, they would not be surprising. People close to Murdoch have speculated that he will find a senior role at Dow Jones for Robert Thomson, the current editor of The Times of London. Thomson has been an adviser in the pursuit of The Journal.
Also, it has been bruited by some within the News Corporation that buying Dow Jones could set the stage for the eventual move of Murdoch’s son James to the United States to oversee the company’s print, television and online network businesses, with Ailes playing a senior role.
Both Thomson and James Murdoch, who is the chief executive of BSkyB in London, have said they had no immediate plans to leave their current posts.
At The Journal, Murdoch has agreed to a series of measures intended to protect the paper’s editorial independence from corporate interference, something the media billionaire has been known to engage in over the years at other newspapers he owns. Top editorial executives cannot be removed or added without the approval of a new oversight board, but Murdoch can make changes on the business side.
For now, he has voiced his support for the new managing editor, Marcus W. Brauchli, and said he does not plan to replace the chief executive, Richard F. Zannino, or the publisher, L. Gordon Crovitz. One person close to Murdoch said it was his style to see how things worked out before making any judgments.
One major marker is going to be how Zannino approaches The Journal brand internationally. The company has scaled back its European and Asian editions in recent years and they did not figure prominently in the growth plan Zannino put in place when he became chief executive last year. Murdoch, however, is keen to turn up the heat on The Financial Times.
“He will give the management there the confidence to put up some of the plans they had in the past and didn’t have resources for and see how they run,” the person close to Murdoch said.