We Must Destroy The <i>Wall Street Journal</i> In Order To Save It

As much as many well-wishers hope that a GE-Pearson counteroffer for Dow Jones might stave off Rupert Murdoch's Snidely Whiplash routine, a deeper analysis suggests that it may result in something of a Pyrrhic victory. And no one is more acutely aware of this than the Journal, itself:

"[A Pearson deal] could lead to significant cost cutting to make the deal work at anything close to $60 a share. Analysts estimate the FT Group, CNBC and Dow Jones would need to generate as much as $300 million a year in savings for Pearson to make an 8% return on its investment. That is a large sum relative to Dow Jones's total costs, which last year were $1.1 billion.

Bancroft-family members, who haven't been briefed on the GE-Pearson talks, were concerned that GE and Pearson might cut staff and shut the Journal's international editions, people familiar with the matter said."

Emphasis ours, because should this play out in this fashion, don't expect the operation over at Pearson PLC's Financial Times to take a hit in all the cost-cutting carnage. Jack Shafer may be of the mind that the FT should plunder Journal talent of the expense of their own, but, somehow, we imagine that Pearson sees things a little differently.

Related:GE, Pearson on Defensive [WSJ]

Previously, on Eat The Press:This Day in Murdochiana: Jack Shafer is in a Glass Case of Emotion