It’s Not Just The Financial Times, New York Times and CNBC That Rupert Murdoch Will Target, But With US Newspapers Drastically Reducing Their Business News Pages He’ll Also Try To Make The Wall Street Journal Brand The Choice For The Common Man

Philip Stone August 2, 2007

Contrary to all the nonsense the Bancrofts and the New York Times put out, Rupert Murdoch is not about to destroy the Dow Jones editorial reputation for which he has paid so much – indeed look for Murdoch’s global plan to make the Wall Street Journal THE US newspaper of record, not just for more of the world’s major business and political decision makers, but also for the common man. If he pulls all of that off then $5 billion will look like chicken feed.

Much has been made that Murdoch has announced his Fox Business News Channel with cables deals providing some 30 million US households will launch on October 15, and the expectation is that the Dow Jones and Journal brand will be all over that. Of course there is that little problem of the exclusive agreement between CNBC and The Journal for the newspaper to provide its news content exclusively to that very channel that the new Fox channel sees as its Public Target Number One.

Murdoch usually handles such problems by throwing money at it, but GE, the parent of CNBC, isn’t exactly hard-up, CNBC makes good use of the Journal brand itself, and why should it give it up to help a contender who wants to put it out of business? He may well just have to suck that one in for the next five years.

As for the Journal, remember it’s not just the US edition, with its 2.1 million daily circulation, but there are also the European and Asian editions, each with around 80,000 subscribers each, and there is the Journal’s web site with 900,000 subscribers.

The main international competitor is the Financial Times with 440,000 global circulation (it has more circulation in the US than it does in the UK) plus 98,000 subscribers to Ft.Com. In the US Murdoch’s big target is the New York Times with its 1.1 million circulation and around 13 million unique visitors monthly to its web site.  While that is only half the Journal’s print circulation it is more than 10 times its web visitors and the Times is considered to be America’s most prestigious newspaper.  Murdoch’s intended legacy is that he be the owner of America’s most prestigious newspaper, and since he won’t get his hands on The New York Times then he has to turn the Journal into the most prestigious newspaper. When it comes to legacy, he is 76 after all, financial spreadsheets aren’t so important any more.

Murdoch’s intent is to build the Journal into a truly global brand and the key to doing that is to improve, not ruin, its editorial reputation. As he told the Bancrofts early in the negotiations, he understood that any interference on his part in editorial integrity “would break the trust that exists between the paper and its readers, something I am unwilling to countenance. Apart from breaching the public’s trust, it would simply be bad business.”

Murdoch has paid a 65% premium for Dow Jones, and that implies he has paid a great deal of money for the “goodwill” that the Journal brand carries. The last thing he will do is throw that away, rather he will want to build the newspaper’s prestige.

Murdoch will likely not forget the hatchet job series the New York Times ran on its front page during the Bancroft negotiations, pointing out all of Murdoch’s alleged weaknesses. Even more reason now for Murdoch, via the Journal, to fire back at the Times where it will hurt the most – by having the Journal take away the Times’ reputation as the US newspaper of record.

To do that he is going to have to walk a fine line because if he is going to raise the profile substantially of the Journal’s brand around the world  there is always the fear that the newspaper may “dumb down” its news coverage to the lowest common denominator. Again, he’s not going to ruin the one thing the Journal has going for it – editorial quality – but that doesn’t mean that via the Journal’s web site, for instance, that more information is made available for free and its only the really market breaking information that professionals need quickly that stays behind a pay wall.

And there’s an interesting phenomenon in the US that he is bound to study very closely. A new report just released by the Dean W. Reynolds National Center for Business Journalism has shown that US newspapers, as part of their big cost-cutting exercises have been slicing back on financial news coverage, and particularly in the printing of stock tables. The policy has been to send readers to web sites where they can get delayed stock prices and even create their own portfolios.

Its study showed that about 75% of editors reported their newspapers have “cut back considerably” in recent years on the depth and breadth of the stock market tables they published, and every time they did this they got loads of reader complaints. Making matters worse, the space savings were not used to enhance business coverage – indeed four out of five editors said they were either no increase in editorial space or cuts were made to space and or/staff.

Even more surprising, considering how increased business news coverage were  the buzz words of the 90s  before advertising and circulation declines took their cost-cutting tolls  is that 75% of US newspapers today offer just one page or less of business news. Even among the big papers, two-thirds offer business sections of six or fewer pages, and often one of those pages is a full-page ad.

So all of this means there is now a big hole for a readership – mainly an older readership with spending money in its pockets – who may be thirsty for much more business news than their local newspapers are now providing. They are there for the taking for the Journal’s print edition if the price is right, and/or its web site. All it will take is the right marketing, and News Corp has a good reputation for that. 

With local and metropolitan newspapers having given up so much of their business news space then perhaps increased business news from the Journal intended for the masses may be a niche its waiting to fill. Obviously Murdoch believes that news hole already exists or he wouldn’t be blowing the millions of dollars he is on starting up the new business channel.

And don’t forget that as part of the deal Murdoch now has the Dow Jones Newswires and Marketwatch.com. Take all of this, shake it together, put in the necessary investment which he has said he will do, and the proper marketing, and there is one mighty business powerhouse that can explode upon a global audience.

And just as the pundits said when Murdoch bought MySpace for $550 million that it was too much but now they say what a great bargain he got, so it will happen again with Dow Jones – they’ll say now he overpaid but in the years to come, what a steal he got – for just $5 billion.

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