Tag Archives: Dow Jones & Co.

Why Murdoch's strategy won't work at Wall Street Journal

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Media critic Norman Solomon writes in a column why News Corp. CEO Rupert Murdoch‘s past strategy of using sensationalism and politics in shaping his newspapers won’t work at The Wall Street Journal if he is successful in acquiring its parent company, Dow Jones & Co.

Solomon wrote, “Investors and money managers — prime demographic targets of The Wall Street Journal — are apt to be intolerant of financial news reporting Norman Solomonthat’s unduly screened through an ideological mesh.

“Slanted journalism may be fine for big commercial enterprises when news consumers largely base their outlooks on prevailing media biases. But investors and others who move large amounts of money are apt to be less forgiving when political agendas behind news reports might impede the quest to maximize profits.

“Each day, investors seek accurate news as the basis for their money-related decisions. On Wall Street, they can recognize when an editorial page is spinning and grinding ideological axes. But investors will quickly stop relying on financial news pages if those pages are more dedicated to political maneuvers than well-founded portrayals of business reality.

“In other words, if a newspaper is just distorting reality to the detriment of civic understanding and democratic discourse, the most powerful corporations may not mind at all. In fact, corporate elites are likely to appreciate any storyline that helps them to consolidate power over the nation’s political system.”

Read more here.

Bancrofts must weigh anual check vs. lump-sum payment

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Paul Tharp of the New York Post breaks down the numbers Sunday of what it would mean for members of the Bancroft family if they decided to sell Dow Jones & Co. to News Corp. for $5 billion.

Dow JonesTharp wrote, “The 36 family members currently get an average yearly dividend payment of $572,222 apiece from their company. But they could wind up holding a check of roughly $34.3 million each. It would take 60 years to accumulate that kind of money in $572,222 annual payments. The bottom-line dilemma means deciding whether to use their 64.2 percent control of the company to accept a $60-per-share bid – totaling $5 billion – by News Corp., which owns The Post.

“With no family member involved in the day-to-day operations of The Wall Street Journal, Barron’s or any other Dow Jones property, the question takes on deeper meanings. Add to the mix the fact that the Bancroft family has been steadily selling its shares over the years, and their decision is anybody’s guess.

“This much is certain: Dow Jones stock has fallen steeply from its glorious beginnings in 1967 when it went pubic at the equivalent of $385 per share in today’s dollars.”

Read more here. 

Sloan: Murdoch will win Dow Jones with higher bid

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Allan Sloan, the Wall Street editor of Newsweek, predicts that News Corp. CEO Rupert Murdoch will be successful in his bid for Dow Jones & Co. by raising his bid — despite his concerns for what it will mean for the journalism practices at the company’s Wall Street Journal.

Sloan wrote, “We journalists are supposed to be skeptics (but not cynics). Murdoch’s current statements about not messing with the Journal notwithstanding, I Allan Sloandon’t see how anyone in my business who’s watched him operate can fail to be skeptical about his promises not to influence the Journal’s news pages should he buy Dow Jones. Murdoch’s entire history says the opposite. I don’t share many of Murdoch’s economic and political views (as I understand them—I’ve never met the man, just watched him). My problem isn’t his views, it’s that I value journalistic independence. I hate to see any owner—be it Murdoch or an ultraliberal—impose political, economic and social views on anyone’s news pages.

“I hope Murdoch doesn’t get control of the Wall Street Journal, but I think he will. Some Bancrofts seem willing to sell, and my bet is that Murdoch can prevail by raising his bid a bit and luring a few more family members to his side.

“Family or no family, journalism or no journalism, the stock market’s a place where money talks. With a $65 or $70 offer, Murdoch wouldn’t just be talking. He’d be positively bellowing. I don’t think Dow Jones’s shareholders could fail to listen.”

Read more here.

Even the PR people are worried about business journalism's future

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Kari Hanson, director of corporate communications at Zoominfo, has some interesting perspectives about two recent events in business journalism on her First Person PR blog.

Kari HansonThe two events are the resgination of PC World’s editor because of what he perceived to be meddling in the editorial content and News Corp.’s $5 billion “friendly offer” to purchase Dow Jones & Co., the parent of The Wall Street Journal, Barron’s and Marketwatch.

Hanson wrote, “We all know that the lines between editorial and advertising are sometimes crossed, but the most respected news outlets have always held strong to the separation. If publications who are struggling to maintain a print presence start blurring the lines, it will have a dramatic impact on PR. More specifically, anyone who does PR for the underdog, a start-up or any company without a major advertising budget, will have an uphill battle.

“The second set of articles that have me worried is news that Rupert Murdoch wants the Wall Street Journal (check out the NY Times’ take). I’ll admit I’m a recent graduate of Outfoxed and now cringe when I hear Fox reporters saying ‘some people say …’ But sadly, the first thing that went through my head when I heard was ‘wow – I wonder if that means the WSJ will start giving better stories to the companies supporting George W?’ That view is a little cynical, but having such an important business publication tied to someone who likes to pre-determine news is never a good sign. The WSJ reporters are already trying to stop it. I doubt the deal will happen. But if it does, it makes me wonder if PR will need to adapt.

“It also reminds me that while social media is new, cool and interesting, we still need to pay attention to the print dinosaurs.”

Read more here.

When the biz media writes about itself

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Steven Zeitchik of Variety takes a look at the voluminous coverage of the News Corp. offer to acquire Dow Jones & Co. and notes the business media has been put in a position of covering itself — or a rival.

For example, News Corp. CEO Rupert Murdoch was interviewed the day the offer broke on Fox News, but in no other media.

VarietyZeitchik wrote, “The Murdoch interview posed an even bigger problem for the Journal. Here was the biggest business story of the day, and the respected paper didn’t have an interview with the principal — the exact interview that the Journal usually gets ahead of everyone else.

“So the decision was made to post the transcript of Murdoch’s chat with Cavuto on the Journal’s Web site, making for the unusual instance of a potential buyer getting a platform in the very publication he’s seeking to purchase.

“It got even more surreal after the Bancrofts’ rejection. Now a newspaper was printing a pitch to its owner even as the owner was rejecting that pitch. (At least no one will say the Bancrofts exert editorial control.)

“And Murdoch’s New York Post? The next day’s paper referenced the bid in its business section … on page 37.

“But it couldn’t resist a little politicking of its own. In the second graf of its main story, the Post provided a built-in defense to the Bancrofts’ widely reported rejection of the bid. ‘Sources said many of the younger Bancrofts want to sell and it is the family’s older generation that’s against the idea.’

“One could only wonder where those sources originated.”

Read more here. And if you think Variety can’t cover business, remember that its headline after the 1929 stock market crash was “Wall Street lays an egg.” It’s considered one of the most famous headlines from the era.

Why Murdoch may be the perfect owner for The Wall Street Journal

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Andrew Ross Sorkin writes in the New York Times for Sunday — but already available online Saturday afternoon — that News Corp. CEO Rupert Murdoch may be the perfect owner for the Wall Street Journal.

News Corp. made a $5 billion offer to acquire Dow Jones & Co., the parent of the Journal, Barron’s and Marketwatch, two weeks ago. It became public this week.

Rupert MurdochSorkin wrote, “Mr. Murdoch spoke enthusiastically about opening new bureaus and expanding others. He wants to reverse The Journal’s diminished international strategy by investing heavily in the paper in Europe and Asia. He says he is spoiling for a fight with The Financial Times, in much the same way that he took the left-for-dead Times of London and made it a real competitor to The Telegraph. He talked about spending money on marketing and on greatly expanding The Journal’s brand online, leveraging the many media businesses he owns around the world.

“The Bancrofts — like the Grahams, who own The Washington Post, and the Sulzbergers, who own this newspaper — are part of an important, even noble, tradition: family ownership of media enterprises dedicated to probing, sophisticated coverage of the world around them. Mr. Murdoch, for the most part, is part of a different journalistic tradition: sensationalism. So the Bancrofts, on journalistic grounds, have good reason to be wary of Mr. Murdoch.

“Mr. Murdoch is also part of another tradition: farsighted, creative and risky business gambits. He has made piles of money by thinking ahead of many of his competitors. The Bancrofts have presided over a company that once held a dominant position in business journalism, and they let that lead, and the financial gains that came with it, slip through their hands.”

Read more here.

Financial news = lucrative product

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Aaron Patrick, Jason Singer and Stephanie Kang wrote in Saturday’s Wall Street Journal about the Reuters/Thomson talks and how that potential merger is indicative of the importance of financial news and information on today’s society.

ReutersThey wrote, “The burst of takeover activity shows that as more and more general news becomes available free online, financial information — especially analytical tools to slice and dice bond and stock data — remains a lucrative product. The customers for it include well-heeled Wall Street traders and big financial institutions, among them hedge funds and investment banks. And as they increasingly deal in complex financial products such as exotic derivatives, their need for real-time, detailed financial data increases.”

“Later, they noted, “Dow Jones Online is a big player online, the No. 4 financial news and information Web site after portals Yahoo! Finance, MSN Money and AOL Money & Finance. In March, 7.8 million unique visitors in the U.S. went to Dow Jones sites, according to Nielsen/NetRatings.

“More detailed financial information has lately become available free on various Web sites, which also offer stock quotes and some financial modeling tools. But they don’t offer the sophisticated real-time data and analytics of the data-terminal business dominated by Bloomberg, Reuters and Thomson. For instance, stock quotes on free Web sites are typically delayed by 20 minutes, although CNNMoney and other financial sites have been pushing stock exchanges to give them up-to-the-second data.

“For news, traders often want to have at least two news wires running on their terminals so they can check another version of the same story. This also helps ensure that they see important headlines as quickly as possible. ‘Clients need to make snap decisions, and Reuters and Bloomberg compete to get news headlines out first,’ said Jason Page, head trader for Churchill Capital, a small brokerage firm based in Monaco. Mr. Page uses a Bloomberg terminal but also has access to Reuters news. ‘A few seconds can make a huge difference on price,’ Mr. Page said. ‘It’s hugely important to watch the news and see how the prices move.’”

Read more here. A subscription may be required.

Upheaval in financial news

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Steve Lohr of the New York Times writes Saturday that News Corp.’s office to buy Dow Jones & Co. for $5 billion plus Thomson’s overtures to Reuters Group Plc signal massive upheaval in the financial news business.

ThomsonLohr wrote, “Financial news and information, they say, has a growing worldwide audience, and that affluent community is a lucrative market for advertisers and subscription services. And the opportunity, they add, is multimedia, with financial news and data delivered over the Web, on television, in print and to specialized computer terminals on trading desks.

“‘This is all about exploiting these financial news, information and data sources globally as never before,’ said Harold Vogel, an independent media industry analyst. ‘And no matter who ends up owning these companies, that is the way of the future.’

“For both companies, the proposed mergers confront current problems. For Thomson, one of the most aggressive and innovative media companies but one with very little public profile, acquiring Reuters would greatly increase its competitive position against the current leader in the market, Bloomberg. Reuters would lift Thomson’s share of that market to 34 percent from 11 percent, compared with Bloomberg’s 33 percent, according to Inside Market Data, a research firm.

“Currently, Reuters is No. 2 in financial data, after Bloomberg, and Thomson Financial is No. 3. They are competitors, but they tend to cater to different customers, analysts said. Thomson customers tend to be institutional investors, while Reuters customers are more often brokers and bankers who sell securities.”

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Regulators probing Dow Jones insider trading

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The New York attornety general’s office and the Securities and Exchange Commission are investigating possible illegal insider trading in Dow Jones & Co. stock before it was revealed that the owner of The Wall Street Journal, Barron’s and Marketwatch had received a $5 billion offer from News Corp.

Insider trading cartoonKaren Scannell of the Journal wrote, “A Dow Jones spokesman said the company had received a subpoena from the attorney general and an inquiry from the SEC. ‘We will cooperate fully with the authorities investigating the matter,’ the spokesman said. A News Corp. spokesman said that company too had received a subpoena from the attorney general and an SEC inquiry. ‘We are cooperating fully,’ the spokesman said.

“Eric Corngold, New York state’s executive deputy attorney general for economic justice, declined to comment, as did an SEC spokesman.

“Several investment banks are advising News Corp. and Dow Jones. It isn’t clear if any have been contacted yet by authorities.”

Read more here.

WSJ union to Murdoch: You just don't get it

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The union that represents the business journalists at The Wall Street Journal, Barron’s and Marketwatch responded Friday in an e-mail to its members that comments made by News Corp. CEO Rupert Murdoch in a story in Friday’s New York Times show that he doesn’t understand the Journal.

IAPENews Corp. offered to buy Dow Jones & Co., the parent of the business papers and web site, for $5 billion earlier this week.

Union president Steve Yount said, ”I was particularly troubled by an apparent off-hand comment in the New York Times interview with Rupert Murdoch, quoting Mr. Murdoch saying, ‘I’m sometimes frustrated by the long stories,’ he said, adding that he rarely gets around to finishing some articles.

“I’m afraid Mr. Murdoch doesn’t understand why The Wall Street Journal is The Wall Street Journal.

“Not everything is five paragraphs and picture.

“Dow Jones did not become the most trusted source of business news and information in the world by serving up News Nuggets.”

Read more here.