What If Rupert Murdoch Buys the Wall Street Journal?

Rupert Murdoch’s News Corporation, owner of the Fox News Channel and the New York Post, has made an unsolicited $5 billion bid for Dow Jones, publisher of the Wall Street Journal. The bid is a cash offer of $60 per share, and for the Bancroft family, which owns Dow Jones, it presents an almost irresistible offer of nearly twice the stock’s trading value. BU Today talked with Lou Ureneck, chairman of the journalism department at the College of Communication, about the likelihood of the sale going through and the journalistic changes that such a move might bring.

BU Today: What are the chances of this sale actually happening?

Ureneck: I think the chances are pretty good. It’s a generous offer. It’s 60 percent over yesterday’s trading price, and that’s pretty hard to resist.

Is it likely that Rupert Murdoch would change the Wall Street Journal?

I think Murdoch is smart enough to know that he shouldn’t mess with a successful brand. Dow Jones is one of the world’s most powerful brands, and it derives its strength from its reporting and its accuracy. The business coverage in the Wall Street Journal is as close as you can get to gospel. It moves markets. Murdoch would have to be crazy to tinker with that. Let’s not forget that Murdoch owns the Times of London, and as far as I can tell he hasn’t messed with that in terms of bringing the quality down. He is innovative and he’s bold and he’s one hell of a businessman.

What then would Murdoch do with the paper?

I think Murdoch is interested in running in this direction: first, he’s looking for ways to leverage Dow Jones content across other platforms that he owns. He knows that few companies dominate a niche the way Dow Jones dominates the business niche.

Second, Dow Jones has been very successful online. It is the model for a subscription Web site. It has been making money online for many years; it has a compelling Web site that has all sorts of bells and whistles in addition to the news you find in the paper. Murdoch is a smart businessman. He is interested in learning about and exploiting the Internet, and this is an opportunity for him to learn.

The third thing is that while the Wall Street Journal is a first-class newspaper, it has a reputation for uneven management. The quality of management, going back a number of years, is not thought of in the same way that the quality of the newspaper is. Recently, they brought in new management, and they have a new CEO who is smart, aggressive, and innovative. They are making changes, but there are those who feel it could have been better managed, so part of its appeal to Murdoch is that he may think he can better manage the company. All of that means additional profit without messing with the journalistic integrity of the Journal.

How is the journalistic community taking this?

Well, it is Rupert Murdoch, and all of us who care about journalism are uneasy with a News Corp. ownership of a flagship newspaper like the Wall Street Journal.

Is there anything likely to prevent the sale from going through?

The Bancroft family, like the family that owns the New York Times, has two tiers of stock, and by virtue of the way the stock is structured, the Bancroft family will unilaterally make the decision on whether to sell. This is an offer that is very, very serious.

Does Murdoch see something in the Wall Street Journal that others don’t see?

Murdoch sees an opportunity to buy a powerful brand and leverage the content of that brand over other platforms. He is a global information player, and business news and business data are increasingly valuable worldwide. We see that with the ascent of Bloomberg. It’s a very valuable niche to be in.

How would the sale of the Wall Street Journal affect its competition?

The Journal competes with other newspapers, like the Financial Times and the New York Times, but it stands apart as a source of business news. At this point it’s hard to say what it means for the competition. We will see how it plays out. It could certainly make their future more complex if Murdoch uses Dow Jones content across other platforms and develops new sources of competition.

What does it mean for the probability of the sale of other newspapers? Are they all for sale?

Well, the New York Times is going to stay in the control of the Sulzberger family, but public newspaper companies are in transition and in play. I think the ground is shifting and anything can happen to any of these companies.

Art Jahnke can be reached at jahnke@bu.edu.