With WSJ, Murdoch Plans All-Out Media War
With The Wall Street Journal and a new business network, Rupert Murdoch and Fox News chief Roger Ailes plan their next move: all-out war.
By Johnnie L. Roberts
Newsweek
Aug. 13, 2007 issue - Rupert Murdoch, owner-in-waiting of The Wall Street Journal, is taking the high road. After a bitter three-month battle to win approval from enough bickering Bancrofts to buy their Dow Jones & Co., the mogul struck a gracious tone with the family, whose century of control he was now bringing to an end. "Given the Bancrofts' long and distinguished history as custodians of Dow Jones, we appreciate how difficult this decision was for some family members," Murdoch said in a statement issued in the wee hours of Wednesday morning, after receiving enough votes from family members to ensure his $5.6 billion purchase of the company. "I want to offer the Bancrofts my thanks, and an assurance that our company and my family will be equally strong custodians." With that, the great battle for Dow Jones came to a close.
But the war for the future of journalism is just beginning. When combined with News Corp. properties like Fox News and the soon-to-be-launched Fox Business Network, Murdoch's purchase of the Journal will create a juggernaut whose influence ranges far beyond the world of financial news and information. With plans to expand the Journal's political and international coverage, Murdoch is itching for a fight with the nation's presumed newspaper of record, The New York Times, as well as the Financial Times of London. "I want it to be more competitive with The New York Times," Murdoch told Times columnist Joseph Nocera on Saturday. Last week, after the deal was clinched, the Journal's editorial page, accusing Murdoch's critics of "commercial" and "ideological" motives, blasted the two Timeses for giving credence to concerns that Murdoch will turn the paper into a mouthpiece for his own right-wing political and business interests. The next day, Roger Ailes, Murdoch's TV news czar, quipped to NEWSWEEK that The New York Times "used to be the paper with all the news fit to put in the bottom of your dog kennel." Pause. "Now, when their owners leave, the dogs are calling up and canceling their subscriptions. It's a dying asset." Ouch.
Murdoch's competitors are already girding for the fight. Executives of the New York Times Co. have met at least once in the past month specifically to discuss Murdoch, according to two well-informed Times journalists who asked not to be named because they aren't authorized to discuss corporate matters. Declining a NEWSWEEK request to interview Times CEO Arthur Sulzberger Jr., the company's top spokesperson said only that the Journal "has been a good competitor and we expect it to continue to be." At the same time, with Ailes's Fox Business Network set to launch in October, CNBC is making a not-so-subtle point of reminding viewers and investors that it is No. 1 in cable business news in the United States (for now, of course). Not to be left out, Bloomberg last Friday touted industry research that it says shows Bloomberg Television "as the network of choice for influential viewers internationally." Time Warner has assembled Time Inc. Business and Finance Network. Thomson Corp. has fortified its position in news and data delivery with the $17 billion acquisition of Reuters. But it is Murdoch, a maverick and master of asymmetrical assaults on existing media segments, who has escalated the stakes most dramatically. Murdoch's promised expansion of the Journal will total "hundreds of millions of dollars," a confidant tells NEWSWEEK on condition of remaining nameless because he's unauthorized to speak on the matter.
Murdoch declined to comment. But during his campaign to woo the Bancrofts, he said he would expand the Journal both geographically and in terms of content. He wants to build the paper's presence in Europe, India and other parts of Asia. He's pledged to enlarge the Journal's Washington bureau. He's considering increasing the size of the paper by four pages.
If the ranks of Journal reporters recoiled at the notion of a meddlesome Murdoch as their owner, the Journal's hierarchy has grown enthusiastic. "Having access to [Murdoch's] satellite, cable, digital and television networks, and especially to his presence overseas, will accelerate getting our journalism distributed more broadly," publisher Gordon Crovitz told NEWSWEEK. If the newspaper had "resources to expand into general news," he said, "our readers would value that."
Because the Journal already has an exclusive deal for its reporters to appear on CNBC until 2012, it's unclear what role, if any, the paper will play in Murdoch's new business channel. CNBC boss Mark Hoffman pointedly tells NEWSWEEK that "he hopes the quality of the material" his channel gets from the Journal "will continue at a high level." While Bloomberg is a key contender in the battle, with 200 million viewers worldwide (including 45 million in the United States), the main event is between CNBC and the Murdoch-Ailes team. There's a tense history here: Ailes was the top exec in CNBC's early years, but then moved to Murdoch. Ailes then wooed NBC employees to Fox News during its start-up years—and NBC, a unit of GE, threatened to sue both Ailes and Fox News.
Now he's at it again. In a NEWSWEEK interview, Ailes declined to disclose any details about the evolving business network, which will reach 30 million homes, about a third the size of CNBC's audience. Ailes intimates that CNBC staffers have been burning up his phone line seeking to jump ship. To keep CNBC guessing about the makeup of Fox Business Network, Ailes says he's been floating "disinformation the last nine months." One result, he claims, is that CNBC changed its slogan to "America's Business Channel" —because, Ailes says, "they thought I might be patriotic" on Fox Business Network. He notes that CNBC's highest-rated program is "a game show" called "Deal or No Deal." And he jokes that most of his rival's revenue comes from weekend infomercials "for nose tweezers and Body by Jake." CNBC's Hoffman says the network has no idea what Ailes and Fox are planning, but he dismisses Ailes's remarks, while a spokesman calls the assertion about the game-show ratings "naive."
With CNBC stronger than it's been in years, its executives are confident. But the rank and file seem more concerned. At a network-wide town-hall meeting last week, most of their questions for Hoff-man and NBC Universal CEO Jeff Zucker were about Murdoch's upstart network. Zucker and Hoffman told them "to be confident but not arrogant." Hoffman says the key is to stay focused on the mission. "CNBC is a network for those who are wealthy and those who want to be wealthy, and that's what we stay focused on every day." We certainly know of one wealthy mogul who's watching very closely.
URL: msnbc.msn.com |
