Why Wall St. Journal Editors Held News of Murdoch Bid
One of the trickiest things for a news organization to do is cover itself. — That was the situation some editors at The Wall Street Journal found themselves in last month when they learned that Rupert Murdoch's News Corporation …
Context & Ripple Effects
On May 2, 2007, Rupert Murdoch's News Corporation made a confirmed $5 billion takeover bid for Dow Jones & Co., the 125-year-old publisher of The Wall Street Journal. Six days later, the New York Times reported the wrinkle inside the target: some Wall Street Journal editors had learned of the bid weeks earlier and chose not to publish it.
That choice puts the paper in the bind every news organization dreads — covering a deal whose outcome decides who owns the people doing the covering. How transparently the Journal reports on its own suitor will shape reader trust through what looks like a long negotiation between Murdoch and Dow Jones's controlling shareholders.
First-order effects
- Wall Street Journal editors must report on a $5 billion bidder who would become their own proprietor, and their decision to hold the news means readers got the story first from rivals like the New York Times.
- News Corporation gains negotiating leverage from the delay: Dow Jones's owners face the bid while the paper's own coverage of it is visibly constrained by self-censorship concerns.
Second-order effects
- Competing business desks — the Times foremost — can position themselves as the unconflicted source on the deal, siphoning authority from the Journal precisely on the story the Journal exists to own.
- Dow Jones's controlling shareholders now weigh the bid partly on editorial grounds, since accepting Murdoch means answering whether his stewardship would compromise the newsroom's independence.
Third-order effects
- The episode becomes a test case for the editorial firewall: if ownership changes hands at major papers, newsrooms' ability to cover their own proprietors credibly is the structural question the industry has to answer.
- A pattern of family-controlled publishers selling to cross-media conglomerates like News Corporation points toward consolidation of prestige business journalism under a handful of large owners.
The trend: Prestige newspaper ownership is consolidating into large cross-media conglomerates, forcing newsrooms to prove their editorial independence can survive covering their own buyers.