If Rupert Murdoch takes control of the Wall Street Journal, readers will see a much different newspaper than the one the press and broadcast mogul is poised to acquire in a $5 billion deal for Dow Jones & Co., many in the industry predict.
The changes industry figures are speculating about include broader news coverage as the paper repositions itself to compete with the New York Times; a free Web site, and a stronger push for advertising, observers say.
"There is no question the paper will be dramatically reshaped," a reporter for Advertising Age who covers the press, Nathaniel Ives, said. "We will see the paper covering areas it doesn't currently cover — we might even see a sports section."
Yesterday, the boards of both Mr. Murdoch's News Corp. and Dow Jones & Co. approved the deal and were in the final stages of wrapping up New Corp.'s agreement to purchase Dow Jones, the parent company of the Wall Street Journal, for $60 a share, or a 67% premium over the company's share price at the time the offer became public. The deal is not yet complete, but after three months of wrangling among members of the Bancroft family, which has run Dow Jones and its flagship newspaper for a century, it looks as if there is enough support for the deal to go through. The family controls 64% of Dow Jones's shareholder voting power; for the deal to be approved, less than one-third of the family's vote was needed.
A determining factor in clinching the deal may have been the premium Mr. Murdoch was willing to offer on the share price. "The directors have to defend their decision in case of shareholder lawsuits," the president of consulting firm Peter S. Cohan & Associates, Peter Cohan, said. "The stock was only trading at $36, and here you have a bona fide offer for $60 a share. It is hard to explain why you would turn that down."
Altering the Wall Street Journal could require even more investment. "I don't see Murdoch retreating from their core enterprise of business reporting," the press and broadcast columnist for the New York Times, David Carr, said. "But as for more general-interest news, that is a function of investment if Murdoch wants to spend the dough."
The News Corp. chief has said he is more than willing to spend money on Dow Jones. In an interview with the Wall Street Journal in June, Mr. Murdoch said he would invest more in the company's digital operations and consider making free of charge the Wall Street Journal's subscription-only Web site. At the time, he said a free Web site attracts 10 times as many visitors and five times the amount of advertising. Yesterday, however, he backtracked, telling the Wall Street Journal that the loss of subscription revenue may cancel out any gains from advertising revenue.
He has also said repeatedly that he would like to increase the Wall Street Journal's Washington Bureau, and is considering adding as many as four more news pages to the well-regarded business daily.
"Given that so many newspapers are getting out of the business, there is certainly room for more general news coverage in the world," Mr. Carr said.
Other changes could include recruiting high-profile financial journalists while letting others go, and hiring more journalists from Britain and Australia, a press business analyst at the Poynter Institute, Rick Edmonds, said. "I read him to be a believer in the natural superiority of British and Australian journalists and the idea that they have a sharper edge and work much more quickly than American journos," Mr. Edmonds wrote in a column yesterday. Making the paper more global, however, could create problems. "The paper collects news internationally but tells it in an American voice," he said. "Introducing a foreign accent could provoke reader backlash."
One of the most important changes to the Wall Street Journal could be its editorial content, as critics worry that Mr. Murdoch could interfere with the integrity of the reporting much the way he is said to do at his other high-profile daily, the New York Post.
Mr. Murdoch "tends to blur and cross the line between his business interests and reporting," Mortimer Zuckerman, the owner of a rival newspaper, the New York Daily News, said. "I have witnessed some of the worst of his practices at the New York Post. … It raises concerns about what he will do with the Wall Street Journal."
It isn't just Mr. Murdoch's competition that is concerned. "He doesn't have a reputation as a stellar journalist in his own right," a professor at the Columbia University School of Journalism, Arlene Morgan, said. She said his acquisition of Dow Jones made her "nervous."
Mr. Murdoch may have good reason not to mess too much with a recipe that, on the whole, works. While in June he told the Wall Street Journal that the paper "has got to get more advertising," the outlet still leads other business publications in advertising revenue. If he changes the paper too much, he could risk losing current advertisers.
"We do an annual survey to find out what publications are read by our target audience," the executive director for advertising and brand management at the management consulting firm Accenture, Teresa Poggenpohl, said. "Right now, the Wall Street Journal is high on the list in terms of business tools that our target audience uses, but if down the road we see that impacted, it would change our decision making." The firm's next annual survey takes place later this fall.
To prevent any major rupture in the paper's operations, industry watchers say that while there will be changes, they will likely be made gradually. "I think that any changes you will see will be slow, incremental," Mr. Carr said.
While there is the prestige of owning Dow Jones, the point of Mr. Murdoch's acquisition is to strengthen his company's bottom line. "The only reason you buy a company, especially at such a high premium, is because you think you can manage it better and make more money from it," Mr. Edmonds said. "For down market tabloids like the New York Post, Mr. Murdoch likes to be hands on, but the Wall Street Journal is a different proposition."