Now that Rupert Murdoch appears to have his deal to buy Dow Jones, and with it the Wall Street Journal, it may be time to face a sobering truth: Murdoch's purchase might be the best thing the protesting news staff at the Journal can hope for.
The newspaper business is not a growth industry. The number of habitual readers of daily papers is down from nearly 78 million in 1970 to just above 50 million today. With the decline in the size of the audience dailies can deliver to advertisers, and the fact that the reading demographic skews toward older folks, it's no wonder that advertising revenues are dropping inexorably, driving more and more papers out of business.
Whereas there were nearly 1800 dailies in America in 1950, today there are about 1400. Not, perhaps, as large a drop as one might expect, except that almost all of the papers in small cities, and too many in major metropolitan areas as well, are chain-owned operations which get most of their news from the wire services and employ one or two reporters who file local stories that are little more than slightly rewritten press releases. These papers exist primarily as vehicles for local advertising and public notices. Formerly successful newspapers are increasingly propped up by corporate owners as brand names solely to give credibility to potentially more lucrative TV and Internet enterprises
Some quality papers are kept going by families that control the corporate structure through special stock arrangements (The New York Times and the Washington Post for example) and/or they are subsidized by other corporate entities (ditto). Dow Jones has been dominated by the Bancroft family, whose members, like the Sulzbergers and the Grahams, have been willing to accept a low return on equity because they thought of the Journal as a sort of public trust. The Bancrofts have been hands-off owners for some years, and as many observers have pointed out, the management that they most recently supported has made bad corporate decisions, leading a significant number of family members to want to cash out.
Enter Rupert Murdoch, who has the resources to underwrite the paper and the willingness to pay top dollar for what he wants. Murdoch's primary goal is not to make the Journal itself more financially viable. He sees it as a platform for his larger ambitions. Murdoch does not think small. Witness his support of the New York Post which he bought from Dorothy Schiff in 1976 for far more than anyone else was offering, and on which he is willing to lose $20-30 million annually for the pleasure of having a voice in New York and national politics.
Murdoch knows and apparently loves newspapers. Unlike, for example, Sam Zell, the Chicago real estate mogul who recently purchased the Chicago Tribune and the Los Angeles Times. Zell has expressed no interest in the quality or the content of the papers he bought. He sees them as investments and wants only to improve their bottom line. The Chicago Tribune was a real paper under Col. Robert McCormick (whatever you think of his politics, he was a man who cared about his paper and served his hometown faithfully) and the Los Angeles Times was a good paper under Otis Chandler, because those owner-publishers didn't just watch the bottom line. When the non-Otis Chandlers gained control, they wanted a better return on the investment and brought in corporate managers rather than newspapermen. Despite gutting the paper, these geniuses could not stem the losses. The financial losses are quantifiable; the loss to the community, and to the people who worked at the Times, is incalculable. If San Zell imposes further cuts in costs, what will be left?
What today's major newspapers need is owners who look beyond costs to the needs of the community (while meeting to their own ego needs as well). The LA Times would probably be better off- and by extension the city of Los Angeles would be better served - if the paper were bought by someone whose deep pockets and charitable impulses would allow them to run the papers as a community service. David Geffen or Ron Burkle, both of whom have expressed interest, might be the best the paper and the city could hope for.
New York offers a model: The Times is a special case, but neither the Post nor the Daily News can support themselves. Murdoch and Mort Zuckerman keep their papers alive for their own reasons. And the city is better off for it.
As for the Wall Street Journal, whose print and online advertising revenues are shrinking, there are no bidders other than Murdoch. GE reportedly considered making an offer and then declined. What do GE's corporate managers know about journalism? Do they have a different mindset than Sam Zell? Not likely. If the Bancroft family had been able to find another news organization to buy Dow Jones (and apparently they weren't), it would likely have been Gannett or the McClatchy Corporation - two chains that are cutting costs to the disservice of their papers across the country.
Only Rupert Murdoch values the Journal enough to pay a premium to get it. Only Murdoch is likely to maintain, and perhaps even expand, its staff. He will almost surely meddle in some of its news coverage-notably the coverage of China-but the politics of the editorial page are already in line with his. One reason Dolly Schiff sold the New York Post to Murdoch-despite his politics-thirty years ago, was that she knew he would keep the paper alive. She did not want to be known as the owner who drove a lot of hard-working journalists from their jobs and killed off the oldest continuously-published daily paper in the country.
If you believe in the value of the third estate to inform the population and to monitor the executive and legislative bodies at a national or local level, then even a paper whose politics you disagree with is better than no paper at all.