What Rupert Wants, Rupert Gets

According to The Wall Street Journal web site, Rupert Murdoch is moving in his closest allies to run Dow Jones and out goes CEO Richard Zannino who announced his resignation Thursday to be replaced by Les Hinton who runs New International in the UK (Times of London, Times, News of the World, Sun), and The Journal also says Publisher Gordon Crovitz goes (but no resignation announcement as this is written) to be replaced by Robert Thomson, editor of the Times of London.

Thus Murdoch is putting in place a management team he has worked with for many years and trusts implicitly. It was said that during the period where Murdoch had made his $5.2 billion bid for Dow Jones and was trying to persuade the Bancroft family to sell that Thomson was almost weekly commuting across the Atlantic to advise him on the deal. 

No editorial changes yet announced, but with a strong editorial hands-on publisher like Thomson any editor is going to have a tough time, no matter the editorial board that has been put in place to safeguard the Journal’s editorial integrity. After all, Murdoch is not about to mess-up a $5.2 billion investment, he wants a good return on his money and a reliable team in place that he can trust.   

It’s a bit of the out with the old ideas and in with the new (translation: new Murdoch ideas). For instance, the old Dow Jones management didn’t really want to open up the Wall Street Journal web site which has around 1 million paying customers. It’s a $50 million a year business and they were happy. But Murdoch does want to open it up wide and even if he takes a financial hit in the beginning he is convinced that the advertising model plus a global reach will show him right. But he needed people who believe in such a philosophy in place to make that work.

There had been a feeling that Murdoch and Zannino actually got along pretty well. It was said they were practically in daily contact during the bid process and that Zannino used all of his influence to persuade the Bancroft family to sell. The likelihood is that he could have continued in some other position – perhaps as the CEO of a DJ division -- after the takeover later this month, but he decided apparently that after being the top guy in a company that anything else would pale in comparison.

Don’t feel too sorry for him – in a Securities and Exchange Commission report earlier this year Dow Jones said that if Zannino, 49, were to leave the company for “constructive termination” his severance would be some $19 million in stock and cash. Not a bad payout for a man who only joined the company in 2001 as chief financial officer. He was named Chief Operating Officer the next year and CEO in 2006. 

News Corp shareholders vote on the Dow Jones deal next week and the transaction is set to close by year’s end. Wall Street seems to think the deal is done – Dow Jones shares closed Thursday at $59.97, just three cent shy of Murdoch’s offer. - Philip M. Stone December 7, 2007

Keywords:Rupert Murdoch

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