On paper, it’s a match made in heaven. The proposed marriage of the business-savvy Wall Street Journal and the savvy businessman Rupert Murdoch was celebrated by investors and denounced by journalists.
“He’s a meddler on one hand and it may not be good for the workers,” CNN senior business correspondent Ali Velshi said of Murdoch during the May 6 “Reliable Sources.”
Just hours after the public learned on May 1 that Murdoch had popped the $5-billion question, the Journal’s union – representing roughly 2,000 Dow Jones employees – released a statement opposing the sale. Journalists across the nation joined in, criticizing Murdoch’s “ego” and questioning his “editorial integrity.”
Many journalists emphasized Murdoch’s personality over the business issues involved. Media critic Howard Kurtz said on CNN’s “Reliable Sources” that the purchase “would enhance the prestige of the media mogul.” Velshi added that “Rupert Murdoch does like trophy prizes.”
While story after story cast Murdoch as a threat to journalism and some attacked his character, few were honest that his “editorial integrity” was in question because of his politics. Although, occasionally it slipped out.
The Journal’s union, which has openly opposed Murdoch’s bid, is now courting several “billionaires with integrity,” according to IAPE Local 1096 President Steve Yount’s June 5 statement. But the prospective buyers contacted by the union – Warren Buffet and Ron Burkle – are both left-wing supporters of prominent Democrats.
The Washington Post was fairly frank about the politics involved.
“Almost instantly, Murdoch’s offer was turned down by the Bancrofts, who feared that the media mogul, owner of Fox News Channel and the New York Post, would use the newspaper to further his political agenda and business interests,” wrote Frank Ahrens in a June 1 story.
Business media critic Marek Fuchs warned about the overt attacks in recent coverage of the Murdoch offer.
Media columns were particularly vicious. One Los Angeles Times piece by Tim Rutten called Murdoch a “rapacious carcass” and described the takeover bid as almost as frightening as nuclear disaster:
“[P]robably not quite as frightening as the day we learned Kim Jong Il has the bomb, but close … very close. It could be worse. We might have discovered, for example, that Saddam Hussein had stashed all those missing weapons of mass destruction in a Pasadena storage locker rented to Osama bin Laden.”
The proposed deal, which makes great business sense for Murdoch because of his plan to start a Fox financial news channel, was criticized over and over again by journalists and media critics on Slate.com and Porfolio.com, NPR, Columbia Journalism Review, The New York Times, The Washington Post, CNN and others.
It even provoked Sen. Bernie Sanders (D-Vt.) to condemn the deal during a CNBC interview and say he would try to stop it with legislation. A former News Corp. editor responded that arguing for more diverse media only comes up when a “conservative” wants to do something.
The Business & Media Institute looked at media coverage (excluding The Wall Street Journal’s own coverage) of the possible sale of the Journal and found it consistently pro-union and critical of Murdoch.
The Declining Print Industry
Murdoch’s bid for Dow Jones & Company came at a time when most newspapers are struggling, and Dow’s own stock “was basically where it was in 1987,” according to Daniel Gross of Slate.com
In January, the Denver Post quoted Alan Mutter, a former newspaper editor, about the situation print journalism now faces.
“Publicly traded newspaper groups have lost more than a fifth of their market value in the past two years, or about $13.5 billion, estimates Mutter, who runs a blog about the newspaper industry,” wrote the Post.
Time magazine noted on June 4 that if Murdoch acquires Dow Jones “[i]t will be the result of decades of mismanagement” that has “lagged the industry in profitability.”
In general, the newspaper business is struggling with declining circulation and revenue and having to sacrifice size and staff because of it.
“How bad are things in the newspaper business? So bad that it’s newsworthy when a newspaper isn’t cutting its staff, chopping its newshole or taking some other action,” wrote Paul Farhi in American Journalism Review in 2006.
Reporting about the possible marriage of Murdoch and Dow Jones was filled with union attacks on Murdoch and Fox News or his other media properties. The New York Times did an entire story on June 2. But very little was included about the union’s left-wing politics or its battles with the current owners.
The Journal’s union, IAPE Local 1096, has been dead-set against Murdoch acquiring Dow Jones & Company. On May 4, they blasted him saying, “Murdoch’s media empire includes the less than ‘fair and balanced’ Fox news channel …” They are soliciting offers from left-wing billionaires to buy the Journal.
In March, the union – which is affiliated with the Newspaper Guild Communications Workers of America – was unsatisfied with bargaining, and it was also unhappy with the Journal’s cost-cutting decisions in December.
“Those people are not going to stay at a newspaper where their benefits and pay packages are eroding,” said IAPE Local 1096 President Steve Yount. Yount has been widely quoted attacking the idea of selling to Murdoch.
Daniel Gross, who writes the Moneybox Column for Slate.com, emphasized the fact that the “Journal does not pay a living wage for journalists in the New York area” as reason to support its sale to Murdoch. Yet, the union has stood firmly against acquisition by Murdoch.
Stories didn’t point out the liberal politics of the union parents of IAPE Local 1096. In fact, Newspaper Guild-CWA is part of the AFL-CIO, which threw millions into “grass-roots mobilization” to help Democrats win the 2006 elections. The Newspaper Guild-CWA also openly supported the “Employee Free Choice Act of 2007” that would take away workers’ freedom by eliminating secret-ballot votes in workplaces voting on unionization.
The union supports someone acquiring the Journal, as long as it is a left-wing billionaire like Buffet or Burkle.
Burkle built his fortune from supermarket chains, but is also a noted liberal fundraiser.
“Burkle is a close friend of former President Bill Clinton and has raised funds for U.S. Sen. Hillary Clinton, D-N.Y.,” said an Associated Press story on June 5. According to the Dec. 11, 2006, issue of Forbes, Burkle has raised millions for the Democratic Party.
Does left-wing ownership mean less interference with journalism? An editorial in The Wall Street Journal on June 6 said no: “We don’t see how this [the influence of New York Times CEO Arthur Sulzberger Jr. on that newspaper] differs from most of what Mr. Murdoch is accused of doing with his newspapers.”
The Ignored Investor
What got lost in most of the coverage of Murdoch’s bid was the very important business aspect of the story – that Dow Jones investors stood to make huge gains.
Murdoch’s purchase offer increased the value of Dow Jones & Company by roughly $2 billion. The Bancroft family owns 24 percent of the actual shares, according to The Washington Post. That means the remaining investors stand to gain about $1.5 billion. But finding that information in the news coverage was practically impossible.
Most articles barely mentioned investors who supported the decision.
The same LA Times opinion column that called Murdoch a “rapacious carcass” did mention that Wall Street and investors want the deal to go through, but the writer then insulted the investor class as soulless.
“These, of course, are guys who would sell their mother's kidneys and the kids' corneas if they could get a good enough premium on yesterday's closing price. (Banish the Faustian analogy that just popped into your mind, because there is no market in nonexistent souls),” wrote Tim Rutten.
But the June 3 USA Today quoted an investment expert who put the acquisition in rare perspective:
“The Bancroft family’s idea of just say no (to Murdoch) was relatively naïve because the clock is ticking on this business as a public entity,” said Gamco Investors portfolio manager Lawrence Haverty. “It becomes worth less and less each day largely because they haven’t succeeded in either Asia or Europe, and the newspaper is steadily losing ground every month.”
No Question of Thompson’s ‘Integrity’
While Murdoch’s generous bid for Dow Jones & Company had journalists up in arms, another recent media merger didn’t provoke the same negative attention.
Thompson Corporation of Canada acquired Reuters Group in mid-May. The New York Times responded with a story on May 16 titled “Reuters Trustees Say Sale Won’t Hurt Journalism.”
Compare that to headlines about the Murdoch offer:
“Some on Journal Staff Voice Wish That Different Bidder Would Emerge” – The New York Times, June 2
“Dow Jones bid defended by Murdoch: The media titan has been under fire by foes over his alleged cozy relationship with the Chinese government” – Los Angeles Times, May 15
“Editorial Integrity on the Table” – Portfolio.com, June 4
The May 16 New York Times story said of the Thompson/Reuters buyout: “The deal comes as changes in the news industry put editorial integrity under the microscope at several companies, including Dow Jones & Company, publisher of The Wall Street Journal, which has a takeover offer from the News Corporation, controlled by Rupert Murdoch.”
Sen. Bernie Sanders (D-Vt.) even went on CNBC’s “Kudlow & Company” on May 1 to voice his opposition to the “bad idea” and say he will try to block it with legislation.
“[W]e have got to be opposed to more and more media consolidation … I am working very hard and will introduce legislation to push for media diversity in this country so that you do not have the kind of cross-ownership that we now see,” Sanders said.
Another guest, Ken Chandler (a former News Corp. editor), stated this is really about politics.
“There’s more diversity than anybody ever dreamed of. And this is an argument that comes up every time someone on the conservative side wants to do something,” said Chandler.