Rupert gets the knife out at the WSJ

Rupert Murdoch seeks $100m cuts at Dow Jones | City | MediaGuardian.co.uk

Well, despite all the protestations that he wasn't a wolf in sheep's clothing Rupert Murdoch has quickly moved to realise a profit on his purchase of the Wall Street Journal.

In a media interview he talks of saving over $100 million. He can only do that by junking the journalism.
Perhaps nude stocks and bonds traders on page 3 Rupert? Why not, it's worked for him before.
Or 'stock exchange bingo' - one lucky reader can win shares in the newly revitalised Dow Jones company, where you don't pay for any fancy overheads - like reporters.

"We've already identified the low hanging fruit will be $100m in savings," Mr Murdoch told the conference in New York, in comments reported by Reuters. "But we're about expanding revenue." Mr Murdoch added that News Corp saw "nothing in sight" in terms of buying further assets.

Thanks, Rupe, an old wolf doesn't lose its bite, just a bit of fur above the ears.

Some reading from Columbia Journalism Review

Dear Reader,

For your reading pleasure, as the Bancroft family makes up its collective mind, we offer three recent offerings from
Columbia Journalism Review on the matter of News Corp. and Dow Jones.
Your choice: short, medium, long. We hope you enjoy all three.

The Editors

The Scorpion and the Frog
CJR's editorial on the Murdoch offer



Why the Dow Jones Vote Matters
Dean Starkman on the mission of The Wall Street Journal



Bending to Power
Murdoch historian Bruce Page on how Rupert built his empire, and how he uses it

Tell this man about economics

Take a look at this, it's the opening pars of a story by W. E. Hussman Jr in the Wall Street Journal. I thought this was a reputable paper that employed writers who actually know a thing or two about economics and business (at least from a pro-capital perspective).

But this is just nonsense. How can something that's "free" be a commodity? Being a commodity implies, nay demands, that it also have a price. This was something that Adam Smith worked out over 150 years ago and Karl Marx built a whole thesis around. Read this for yourself:

How to Sink a Newspaper

By Walter E. Hussman Jr.

One has to wonder how many of the newspaper industry's current problems are self-inflicted. Take free news. News has become ubiquitous, free, and as a result, a commodity. Anytime you are trying to sell something that becomes a commodity, you have lost much of the value in providing that product or service.

Not many years ago if someone wanted to find out what was in the newspaper they had to buy one. But not anymore. Now you can just go to the newspaper's Web site and get that same information for free.

The newspaper industry wonders why it is losing ...

There is a real issue here, the declining value of advertising income in newspapers and an unstoppable fall in circulations as readers migrate to the net. So, the issue of free content on the web is of concern to newspaper proprietors and managers around the world.

I was talking to Rick Neville today, he's the deputy CEO of APN newspapers in New Zealand, about these very issues. He has quite a sophisticated view and, as an ex-journo and editor, understands both sides of the news business. Rick pointed out that one reason Rupert Murdoch is interested in buying the WSJ is because it has a very successful high-end online subscription service that adds value to a newspaper subscription and that is attractive to a high-value A-B demographic audience.

Rick says that in the future newspapers will be for a small, elite, market and that the rest of the rabble (my word not his), will make do, or get by with online content.

You might remember from earlier posts that APN is moving most of its sub-editing operations out of house to an Australian company call PageMasters that is setting up in Auckland.

Rick was open about the possible damage to the APN news brand and acknowledges that mistakes will be made. He's not really happy about it when he's got is journo's hat on, but he's also in charge of the economic health of the company and shareholders are demanding a better return on their investment. The cost-cutting is part of that schema.

This is the real political economy of news, and from Rick Neville's perspective, it's about keeping the newspaper afloat. His insights are much more useful in this debate that pages of "insightful" crap from some wally on the WSJ who doesn't even know fundamental economic definitions.

How to sink a newspaper? Easy! Just continue to employ idiots like Mr Hussman and eventually the weight of the dross they produce will send you to the bottom of the ocean of ink.

Murdoch not rich enough yet

Murdoch on owning the Wall Street Journal
So Rupert Murdoch wants to buy the Wall Street Journal for $5 billion, but admits he never reads or understands every article. In an interview with the International Herald Tribune, Murdoch went to great lengths to promote his love of journalism.

While Murdoch went to great pains to explain that he sees himself as a lifelong newspaperman who learned journalism from his father in Australia, he also tried to say that his reputation as an interloper owner was overstated. He said he was not involved with the news operations of the higher-end newspapers, although he takes a closer role in tabloids like The Sun in London and The New York Post.

But his denials about interfering in the editorial work of his many media assets are hollow, to say the least. In Australia, the UK and the US, Murdoch has a long and well-documented history of doing the opposite. His senior editors are all handpicked loyalists and who could forget that every one of Murdoch's papers and the Fox network have been strong supporters of the Bush-Blair-Howard axle of weevils in Iraq from day one.

Nice joke Mr Murdoch, but try pulling the other one.
Interestingly, the Journal itself is reporting this story with a fairly positive spin, even suggesting that Murdoch's lieutenants are keen to win over staff reporters as well as the Bancroft family which currently owns most of the shares in the parent company.
This is not so unusual, the reporting of 'business' news, when the media property itself is part of the story, is often done this way. It's one way of signaling to share holders that the deal is perhaps in their best interests. I'm sure, though, that the union members at the WSJ will not be so easily fooled by the snake oil merchants promising them the moon.

BTW: you can actually watch the great documentary about Fox News, Outfoxed, on YouTube. If you haven't seen it, it's not a bad way to spend a couple of hours in front of the computer not downloading you know what.