New Developments in Murdoch's Bid to Takeover Wall Street Journal

The Wall Street Journal is arguably one of the most respected news outlets on the planet. News Corp is definitely one of the more fearsome predators in mass media. Rupert Murdoch has had more personal vilification than just about any corporate executive.

Question is, now, are things that simple? In acquisition mode, Murdoch is about as subtle as a nuclear weapon, and as ambiguous. His takeover of the London Times, and the move to Fortress Wapping from Fleet Street, raised screams from the journalistic profession which are still remembered with horror. Murdoch is a person who the profession makes a point of hating. He's been accused of editorial interference, right wing political leanings, undue political and business influence. He is currently the only real bogey man in the business. "Outfoxed", the rather selective film, was widely accepted as the definitive repudiation of Murdoch and News Corp, and their whole business approach. Not so long ago, a very well known columnist asked for any information anyone had against Murdoch. The proposed $5-billion takeover of the Wall Street Journal has revived all of that. Strangely, all the hostility from the industry peer group doesn't seem to be having a lot of effect. Anyone familiar with the rise of News Corp could tell you why. Murdoch loves opposition. He thrives on it, and he usually beats it. Rupert Murdoch is the son of Keith Murdoch, one of the first of the modern journalists. Keith Murdoch was a hard case, but a good journalist, and one of the early lineal ancestors of investigative journalism, the move beyond the parrot -version of news. Rupert Murdoch was never expected to match his father. He inherited the Adelaide Advertiser, which would barely qualify as a small town newspaper by global standards. From that base, he built News Corp. It became pretty obvious that Rupert's talent was business. As News Corp developed, his tactics developed. The tough takeovers, the ferocious style, and the sheer muscle of a vastly expanded capital base originated in Australia's rather tame corporate environment. That environment didn't know what hit it, and is still wondering. In the 1980s, the business world was inclined to look at News Corp's debts, and it was almost a macro style to see predictions of the corporation's collapse based on debt to equity ratios, cash flow, and most of the standard evaluation methods. Competitors gleefully produced whatever negative news they were able to find. Anyone who thinks hostility from the sector is anything new to Murdoch really should do their research. What wasn't noticed was that the asset values were going up, and not on the basis of the normal self serving valuations. Over time, the debt to equity relationships were nothing like the lead weights they were considered. They certainly didn't stop the international expansion of News Corp into a very expensive market for assets. I mention this because the hostile evaluations were so inaccurate, and so utterly misleading. They got it very wrong, and they misread Murdoch from day one. The move to the biggest and most expensive media market on the planet was no picnic, either. America didn't want any new players, and was quite prepared to say so, at all levels, including political. Much good it did them. Murdoch has a particular eye for good assets, and a lot of ways of developing them. The US found that it had acquired a larger than usual gorilla as a citizen. Also a rather disturbingly competent gorilla, which knew how to use mixed media assets. For some reason, this information has been a bit difficult to absorb for some people. Murdoch is an expert in media asset management. He's proved that so often that it's becoming a bit too obvious to mention. Fox has grown massively, and the heirloom assets of the old corporation are now worth their weight in gold, literally, adding a significant percentage of revenue to News Corp's large turnover. The Wall Street Journal takeover offer is another move in what has so far been a pretty well organized campaign. The offer was well above the market price when it was made. No, Murdoch isn't a charity, he's making a point. He's also perfectly capable of out-hitting the heavy-money hitters in the industry, and he obviously doesn't mind proving it. I'm a bit dubious about the argument that his editorial style would affect the Journal. He knows the difference between a tabloid and something as demanding as the Wall Street Journal. There's no good reason why he would create issues like that. He has nothing to gain from effectively undermining the value of an important asset. He stands to gain a lot from enlarging and enhancing the Journal, as he has so many other publications. It is very unlikely that he'd throw 5 billion at anything without expecting a prompt return on that sort of cash. In practice, his political and editorial role haven't been particularly unusual. The Talkback TV style shown on "Outfoxed" is really op/ed, in one case, that of a relative of a 9/11 victim, quite obnoxious, but still op/ed in essence. "Outfoxed", to my thinking, was a bit too heavy on trying to show one side of the argument. Politically, he rows his own canoe. In the US, that's how the game is played, and losing isn't a good idea. You can either run a big media operation, or you can be a Fluffy Pink Bunny Rabbit. You can't do both. In Australia, regarding elections, he's 5-5 on picking outcomes, and both sides of politics see him as what he is; a major player in media, therefore to be respected as such. In Britain, the political side of Murdoch is now long forgotten. He's still the bogey man, but News Corp is now an accepted part of the framework. The Wall Street Journal is considered to have the highest standards of journalism and professionalism in the business. That said, this is a new world, and media that can't raise the capital are at risk. To grow, the Journal needs cash, and needs to enter the new media effectively. If not Murdoch, someone is going to have to put a lot of time and effort into the Journal's future. The link, incidentally, is from a Murdoch competitor, Fairfax.