Lisa Reinisch

Media ownership: Murdoch and the WSJ

The Wall Street Journal before its redesign under Murdoch.

What a difference a year makes. More than twelve months after News Corporation’s $5 billion takeover of Dow Jones, the first verdicts on the ‘Murdoch effect’ at the Wall Street Journal are in. And they are not what the pundits predicted.

While the economic climate in the media sector has hardened, attitudes towards News Corporation CEO Rupert Murdoch have softened. His ruthless commercialism suddenly makes sense in view of a potential Western media Armageddon. The much-vilified media baron’s razor-sharp business methods have started to look more like lifesavers and less like nooses at a time when even North America’s most prestigious print titles, including the New York Times and the Washington Post, are struggling with losses, redundancies and budget cuts. Many are impressed with the large investments Murdoch has made in an industry in deep crisis.

Idealism, Murdoch style

Money, rather than politics, is now seen as the name of Murdoch’s game. Michael Wolff, whose biography of Murdoch, Who Owns the News: Inside the Secret World of Rupert Murdoch, was published last month, asserted recently in the Spectator that “this greatest of modern businessmen, the architect of the synergised, cross-platform, integrated, global media company, has no vision, no method, no strategy. Nor, likewise, does this man, perhaps the individual with the single most powerful political voice of our time, have any politics — save for what makes for good newspaper copy or puts money in his own pocket.”

The classic bone of contention concerning media owners is that they have seemingly mutually exclusive responsibilities: to run a successful business, on the one hand, and to fulfil a public duty to help citizens make informed judgments, on the other. Murdoch used to be the devil personified in this context. But as the old media models crumble, so does opposition against Murdoch and his ilk. Better to have quality journalism with questionable sponsors and predictable restrictions, than to have none at all, seems to be the new tenor. With Murdoch, at least you know what you are dealing with. Which can’t be said of a looming global recession.

In that spirit, staff at the Journal appears to have embraced their new boss, who has poured in generous funds but abstained from overt editorial intervention. Veteran News Corporation employee Martin Dunn wrote in the British Journalism Review: “Hysteria has given way to the realisation that being controlled by one of the most aggressive, richest media moguls in the world could bring enormous benefits – but at a price.”

Murdoch is one of only a handful of media moguls who retains majority control of his sprawling business empire, worth an estimated $9 billion. He is easily the world’s most feared and loathed media baron and his pledges to leave the Journal’s editorial office in peace were widely brushed aside as calculated emissions hot air.

Nevertheless, as of now, there have been no outcries from staffers over editorial meddling, no outraged resignations, and no indignant protests. Managing editor Marcus Brauchli quit quietly in April. The editorial standards of WSJ, the glossy magazine that now comes with the Journal’s Weekend Edition, have been criticised. Nothing to excite conspiracy theorists and media watchdogs.

But those who know Murdoch well have forecast all along that he would not make grand changes or dramatic gestures at the Journal. He rarely does in his up-market papers.

Whatever makes business sense goes

This restraint stems not from Murdoch’s respect for journalistic ethics or a concern for the democratic process, but simply from the fact that, in the case of quality papers, overt meddling makes no business sense; it would jeopardise brand value.

It is important to understand that Murdoch plays a completely different role at his quality outlets than at his tabloids, which is not to say that he doesn’t pull strings at both. The crucial difference is the degree of transparency.

“They’re different animals,” he told Time Magazine about his tabloids. “You’ve got to make people want to read ‘em. They’ve got to have some fun and a bit of edge. Agendas up to a point, and certainly crusades. But I don’t call all those shots. I haven’t got the time.” Murdoch is happy to admit meddling with his tabloids. He knows what tabloid readerships care for - and it’s not journalistic integrity.

Too close for discomfort

Murdoch has more subtle, but no less efficient ways of influencing his quality newsrooms. Dunn said that “in 12 years at News Corporation, I rarely experienced or heard Murdoch issue a direct order to an editor to back a political candidate or take a controversial position on a major political issue. But he doesn’t have to. His closeness to his editorial executives makes it almost impossible to misunderstand his views on important issues.” Murdoch does not need to pick up the phone to get his editors to write what he wants. He can rely on their acute sense of what he expects of them.

While Murdoch’s morals and methods remain a topic of fierce debate, his business sense is out of the question. The journal’s newsstand sales have increased by as much as 20 per cent, according to managing editor Robert Thompson, and advertising revenues are on the increase. But it was never the business credentials that worried media commentators - or the Bancroft family, who owned the Journal for more than 100 years before the takeover. It was Murdoch’s reputation as a meddling media owner who is not afraid to interfere in the editorial process.

To placate such concerns, Murdoch wrote to the Bancrofts in April 2007: “We have a history of long stewardship of great newspapers. I always see my role as supporting the editors and publishers of these newspapers. We think we would be the ideal partner to grow and expand your company, as well as protect such a vital public trust.”

Murdoch has made – and broken – such promises before. Only two months later he told Time magazine: “They’re taking five billion dollars out of me and want to keep control, in an industry in crisis! They can’t sell their company and still control it — that’s not how it works. I’m sorry!”

Commerce, not ideology, remains the bottom line for Murdoch.

In other words: Murdoch’s understanding of public service only reaches as far as the requirements of market economics allow. At a recent conference he said: “Everything we have done in life is to create competition. (…) And we consider that a public service. The more choice there is, the better it is.” His actions can always be explained in terms of his current business interests. Truthfulness has never been, and will never be, one of them.