Oh oh...too bad, so sad.
the Times is having trouble. Guess they are finally figuring out like CBS News, you can't go on lying to people and showing your bias and expect to stay in business.
Remember when everyone in the MSM laughed at FOX news???
Newspapers Feel The Murdoch Effect
Louis Hau, 04.22.08, 6:10 PM ET
For a supposedly declining business, the newspaper industry sure generates headlines. Increasingly, Rupert Murdoch is the reason why.
Consider the stories today. Marcus Brauchli, managing editor of The Wall Street Journal, confirms he's stepping down as the newspaper's top editor; Arthur Sulzberger Jr., chairman and publisher of The New York Times, shoots down renewed speculation that his paper is for sale; and reports emerge that Murdoch might buy Newsday of Long Island, N.Y., for $580 million from the debt-swamped Tribune Co. (nyse: TRB - news - people ).
Get used to it. Murdoch, 77, has embarked on perhaps the final act of his audacious, empire-building career. Don't expect him to take things slowly.
Brauchli's departure, first reported late Monday, is sure to cause jitters among the Journal rank and file, who are still adjusting to the fact that they're now part of Murdoch's News Corp. (nyse: NWS - news - people ) empire.
"You had a lot of reporters who saw Marcus Brauchli as a buffer,' said Steven Yount, president of the Independent Association of Publishers' Employees, Communication Workers of America Local 1096, which represents employees at the Journal, Dow Jones Newswires and other publications. "I think they were reassured that he was there."
With that buffer now gone, Murdoch will likely remake the Journal even more quickly. The paper has already undergone significant changes in recent months. Most notably, the Journal refashioned its front page, giving it a far newsier edge and more political coverage than before, helped by Murdoch's decision to beef up staffing in the Journal's Washington, D.C., bureau.
More changes from the Journal of old have been evident this week. On Monday, the paper added a third page to its daily opinion section. And on Tuesday, the paper excerpted a speech on U.S.-European relations that Murdoch delivered the night before to the Atlantic Council in Washington.
A further shake-up of the Journal's editor ranks appears likely once Murdoch installs a successor to Brauchli, adding to a wave of leadership changes at a newspaper that had long been accustomed to stability at the top. Although Brauchli lasted only 11 months in his post, his predecessor, Paul Steiger, had served as managing editor for 16 years. That could prompt some reporters to bolt, but don't count on seeing a mass exodus. In this difficult media environment, where are they going to go?
Transforming the Journal into a more general national daily that can compete better with The New York Times doesn't come without risks. The Journal has long differentiated itself from the competition as the go-to source for authoritative business-news reporting.
It's a strategy that has made it the second-largest daily paper in the U.S., with average daily circulation of 2.01 million during the six months ended Sept. 30, according to the Audit Bureau of Circulations. That was nearly twice as large as the Times, which had average daily circulation of 1.04 million during the same period.
Expanding that lead by reaching out to a more mainstream readership could pay rich dividends. But as the Journal branches out into more political and general-news reporting, it must do so without short-shrifting its core franchise--top-flight coverage of business news. Taking its eye off the latter could alienate its traditional readership base, which has more options than ever for business and financial news.
Either way, Murdoch's moves to remold the Journal will pose a more serious competitive threat for the Times, which held an uneventful shareholders' meeting Tuesday. During his opening remarks, New York Times Co. (nyse: NYT - news - people ) Chairman Sulzberger felt obliged to reaffirm that the paper isn't seeking a buyer. Newsweek reports in its latest issue that aides to New York Mayor Michael Bloomberg had urged the media billionaire to consider buying the Times.
"This company is not for sale," Sulzberger said. "There have been a number of recent newspaper and magazine articles that have suggested otherwise. They are ill informed. So let me reaffirm, on behalf of the trustees, that this company will continue to have the ownership it enjoys today."
In a development that was notable for how quietly it was accomplished, Times Co. shareholders elected Scott Galloway, a New York University marketing professor and founder of Internet retailer RedEnvelope (nasdaq: REDE - news - people ), and James Kohlberg, co-founder of private equity firm Kohlberg & Co., to the company's board of directors.
Galloway and Kohlberg were among four candidates supported for board seats by dissident Times Co. shareholders Harbinger Capital Partners and Firebrand Partners, which had criticized the company for not taking more aggressive measures to boost the stock price. In an unprecedented move, the Times Co. board decided in March to support two of Harbinger/Firebrand's candidates for the board, the first time it had ever backed board candidates nominated by outsiders (See: Board Compromise At New York Times).
In the meantime, outside observers aren't too keen on the company's near-term prospects. On Tuesday, Moody's Investors Service downgraded the company's senior unsecured debt ratings by two notches to Baa3, just one level above sub-investment grade, or junk. Moody's said the downgrade reflected its view that the company's "free cash flow and leverage will remain significantly weaker in 2008 than previously expected due to ongoing deterioration in newspaper advertising revenue and cash that will be used to fund capital spending initiatives and the $132 million annual dividend."
At least the Times Co. has only about $1.1 billion in debt on its books. That's a good deal lower than Tribune, which took on $4.2 billion in debt and refinanced $2.8 billion in existing obligations to complete a Sam Zell-led buyout last December to take the company private (See: Zell Takes The Wheel).
Tribune's reported plans to sell Newsday to News Corp. would generate badly needed cash to pay off debt. But it's likely to be only the first of a string of asset sales that Tribune will have to make to keep its creditors at bay. Earlier this month, bond research firm Gimme Credit warned that Tribune is at risk of defaulting on its loan covenants in 2009.
The company is already planning to sell the Chicago Cubs baseball team and the team's home ballpark, Wrigley Field. Given Tribune's pressing commitments to its lenders, speculation has been rife that other assets, including the Los Angeles Times, could be put on the block as well. Any interest, Rupert?
forbes.com |
