Ineptness at Dow Jones put them in this pickle

New York Times columnist Joe Nocera writes Saturday that it’s the fault of the Bancroft family and past management at Dow Jones & Co., the parent of The Wall Street Journal, that has caused News Corp. CEO Rupert Murdoch to come along with an offer to buy the company.

Nocera wrote, “Although there are four Bancroft board members (including one trustee), none work for the company. Few of them understand much about the industry they’re in; the family largely lacks business acumen. For decades, they have passively accepted whatever steps Dow Jones management has chosen to take, believing that in doing so, they’ve been ensuring the independence of The Wall Street Journal. After all, that’s what Dow Jones management has been telling them all these years. So has Roy Hammer, their longtime (and since retired) lead trustee.

“It is great that The Journal has not been Gannett-ified — or Rupert-ized, for that matter. It really is. But the family’s passivity has come at a steep price. For a long time now, Dow Jones has been the worst-run media company in the country. It has missed one opportunity after another to transform itself from a small newspaper company to a diversified financial information company, something Thomson did so successfully. And the efforts it has made at diversifying have largely backfired, mainly because Dow Jones management didn’t know what to do with the assets it purchased. The Bancrofts’ neglect — their unwillingness to hold Dow Jones management accountable for its mistakes — has not only hurt them and their heirs, it has hurt the company they all profess to love. And it has made Mr. Murdoch’s bid possible.

“I HAVE a theory as to why Dow Jones management has been so inept over the years. It is a company that has long prided itself on being run by journalists. That was also part of preserving the integrity of The Wall Street Journal. Journalists, after all, would be less likely to damage the paper or cater to advertisers. But journalists tend to be terrible businessmen; they lack the risk-taking mindset that marks a good chief executive. Making the kind of big, bold bets that C.E.O.’s have to make all the time in industries undergoing wrenching change, like the newspaper business, just does not play to their strengths, which are observing, critiquing and finding out things.”

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