TimesLeader.com

Richard L. Connor | Opinion

June 25, 2007
Cash will knock Journal sellers off high horse

By Richard L. Connor rconnor@timesleader.com
Editor and Publisher

I WOULD NOT expect our readers to take the same interest as I have in all the shenanigans going on these days at The Wall Street Journal but there are some underlying themes that shed light on philosophies of management at newspapers of all shapes and sizes.

And, quite frankly, some of the standard practices at newspapers are befuddling to owners and operators of other businesses.

Rupert Murdoch has made an offer of $5 billion for The Wall Street Journal, which is owned by the Dow Jones company. This is equivalent to $60 a share, a premium of 67 percent of the value of the stock when he made the unsolicited bid several weeks ago.

Here is a quote from this past week’s Journal that many persons at a newspaper, particularly in newsrooms, would find worrisome but owners of non-newspaper businesses would believe to be a perfectly normal expectation for the buyer of a business.

“Since making his $5 billion offer for Dow Jones, Mr. Murdoch has said he will not spend that kind of money without having true control of the company and all its components.”

The reporters and editors of The Wall Street Journal have themselves in a group state of apoplexy over Murdoch wanting to control a business he buys. They worry he will strip them of editorial independence and blur the lines between news and advertising and promotions of his other businesses.

Here is what we have lost sight of in this business. The primary concern for readers of a newspaper should be one of trust. And that all boils down to this question: can you believe that we have done all we can to be fair and to try our best to get the facts straight? We work hard at getting things right but this is a business where we often fail and when we do, it is directly in front of our readers, set in print forever.

So, usually we make corrections and apologize. Then we try to do better the next time.

Readers also need to know that we do not “sell stories” to advertisers. They can buy an ad but not a news story. If one should be written about an advertiser it should be because the story meets normal news criteria.

One of the reasons I carry both titles of editor and publisher is because I want to be held responsible for what we print. I should be. Rarely do I see a story before it is published. In fact, I believe I may have looked at one political story before it was published in the last year, and that’s all.

I do confer daily primarily with Joe Butkiewicz, managing editor, about what news we are covering, but I am not hands on in any capacity other than to set an overall tone of my expectations about The Times Leader.

“When a paper starts to go bad and go down the drain, the buck stops with me,” Murdoch said in The Wall Street Journal this past week.

I feel the same way and I also believe that papers which have begun to decline in quality of content, customer service and financial performance have done so because those papers did not have publishers and owners with hands on the steering wheel. This is really quite simple and reasonable.

But it is also reasonable to expect to operate and control a business you buy even if it is a newspaper.

Controlling stock in The Wall Street Journal is owned by a group now becoming popularly known as “The Bancroft Family.” They have various family branches that have expanded for decades from original majority owners of the newspaper. Three of the family members sit on the Dow Jones board.

Many family members, according to reports, live primarily off proceeds from Dow Jones dividends. Their take from cash produced by the company each year is one of the main reasons Dow Jones does not perform at higher profit margins.

“The family” appears to be comprised of a few sane, reasonable folks and then several others who have not had to work for a living. The latter include hypocrites who hide behind a veil of anonymity and will not even allow reporters at their own newspaper to quote them on the record, yet want to criticize Murdoch for lack of transparency.

They are collectively ringing their hands in public about journalistic integrity when all they really want is money. And in the end, money is what this is all about. Even reporters at The New York Times this past week fell into lock step with the family, writing this drivel:

“The Bancroft family, which controls Dow Jones through a special class of shares, initially rejected Mr. Murdoch’s overtures but recently agreed to meet with him. Though price is a factor, the family’s main concern appears to be preserving the editorial independence of The Journal amid concerns that Mr. Murdoch, who presides over a vast constellation of media assets around the world, would seek to influence its coverage for political or business reasons.”

Let’s read this again: “Though price is a factor…..”

Come on. Price is the factor. It always is in a business deal. Stop the charade.

I’ve bought a number of newspapers in my day and I’ve also bought a lot of horses. The sellers of each are not much different. “What’s really important to us,” says the person selling a horse “is that old Tonto go to a nice home. He’s part of the family. Money is not our primary objective.”

And that sounds so soothing to the potential buyer who assures the seller he or she has just the right home for a four-legged family member.

Then they begin talking price and, suddenly, the seller makes it clear the horse will be sold to the highest bidder, good home or slaughterhouse.

Some members of the Bancroft family have stepped aboard a horse of their own -- a high horse. They are furrowing their brows and wringing their hands in public worrying about Murdoch’s reputation for conservative politics and taking a hand in news coverage.

This is the cycle of many family businesses. In my experience I know the most about family newspapers. A pioneer, and often a crusader, starts the paper and struggles to make a go of it. The newspaper succeeds. Future generations come along and lack the desire of the founder to work in the family business, but they like the money it produces.

Over time, though, as generations multiply, the money gets divided more ways and less of their wealth is in cash and more is on paper. They get tired of being told they are “worth millions on paper” but have to live on a dividend budget. They socialize with the rich and famous but often cannot afford what their friends have.

So, one day they say that as much as they enjoy life on the beach they want to buy the mansion that overlooks it. They do not want paper wealth. They want the dough.

In the weeks and days ahead there will continue to be much posturing by the family members about wanting The Wall Street Journal to go to a good home. Ultimately that “home” will look a lot like a bank.

This is not a new story. It happened with the Chandlers in Los Angeles where the same proclamations were made when the L.A. Times was sold to the Tribune Company. Otis Chandler, now dead, is still heralded as the last great publisher of the paper but while its profits were declining he was surfing.

And it happened in Louisville when The Courier Journal was sold to Gannett. Years prior the publisher, Barry Bingham Jr. -- also now dead -- took a year off to study at Harvard while back at home his family paper began to struggle and flounder.

Murdoch won’t be surfing or studying the classics in some post-graduate Ivy League university program. He’ll be on deck running the business like he owns it. Which he will. That’s a concept that does not compute with people such as many of the Bancrofts but at the end of the day they can still add and subtract from their checking accounts. That’s when their bragging about editorial independence and control will go silent.

And they will go out and buy something nice for themselves to soothe the stress and tension of being multimillionaires.

Richard L. Connor is editor and publisher of The Times Leader. He can be reached at rconnor@timesleader.com