By: E&P Staff
It may surprise many to know that the Wall Street Journal does not make a fair amount of money — and that’s why the door is open to a purchase by Rupert Murdoch, The New York Times reports on Monday. Meanwhile, Howard Kurtz in The Washignton Post examines the ways such a deal could be a good thing.
?I would say The Journal is probably marginally profitable,? said John Morton, the newspaper industry analyst based in Silver Spring, Md., tells the Times. ?No question they?ve made some things better in the last couple of years, but there are trouble signs.?
The article points out: “Dow Jones is profitable overall, although like many media companies it has been squeezed as readers and advertisers migrate to the Web. But The Journal itself, despite weekday circulation of more than two million, second only to USA Today in the United States, has lagged far behind most major papers in profit margin.
“That performance has helped depress the stock price, making Dow Jones an attractive takeover target for Rupert Murdoch and his News Corporation, whose bid for the company sent the stock price soaring.
“And already, 2007 is looking worse than 2006.”
The full article is now up at the www.nytimes.com.
Kurtz opens his column today, in print and online at www.washingtonpost.com, as follows.
While much of organized journalism recoils in horror from Rupert Murdoch’s latest business gamble, let’s see, as a thought experiment, if we can construct a case for his taking over the Wall Street Journal.
The newspaper business is battered these days, with rich folks buying up properties at fire-sale prices and proceeding to slash costs. Avista Capital Partners just cut 50 newsroom jobs at the Minneapolis Star Tribune. Philadelphia public relations executive Brian Tierney laid off 71 at the Philadelphia Inquirer. Chicago real-estate mogul Sam Zell hasn’t taken a wrecking ball to the Tribune papers yet, but the chain’s jewel, the Los Angeles Times, announced plans to eliminate another 150 editorial jobs. And none of these new owners had a previous day of newspaper experience.
Along comes Murdoch with a generous offer to buy Dow Jones, and he’s not talking about slashing costs. In fact, he told the New York Times he wants to expand the Journal’s Washington coverage.
Love him or hate him, the Australian-born newspaperman knows something about running media businesses. He created a fourth American network, won the rights to NFL football, built the top-rated cable news channel and snatched up the hugely popular networking site MySpace. Now, at 76, he wants to own the nation’s premier financial newspaper so badly he offered to pay two-thirds more than the parent company’s stock was worth.