Dow Jones/News Corp. illustrates why public ownership of papers is bad
Gary Weiss writes on Salon.com that the $5 billion offer by News Corp. to acquire Dow Jones & Co., the parent of The Wall Street Journal, is just another illustration of why public ownership of newspapers has been bad for the journalism business.
Weiss wrote, “The reporters at Dow Jones know that you can forget about all the spin you see from the Murdoch camp — about how he will continue the Journal’s lofty journalistic traditions and how he beefed up the foreign bureaus of the Times of London when he took over that paper. If and when Murdoch gets Dow Jones he is going to make money on it, and that will require drastic cutbacks — entire ‘inefficient’ divisions shuttered, employees thrown into the streets. Employee union negotiators, who had thought current management was hardheaded, are likely to look back on the pre-Murdoch days with nostalgia. ‘He’s paying 40 to 50 times earnings, and he is going to get a return on that. He is going to crank down on costs,’ said one longtime Dow Jones journo who knows his way around a balance sheet.Â
“AndÂ why not? Dow Jones opened the door to Murdoch — or anyone with sufficient bucks to buy the company — when it became a public company in 1963.
“The Murdoch-Dow Jones face-off is only the most dramatic illustration of what has been obvious for a long time, which is that public ownership and newspapers do not mix. Investor interests can be balanced against the interests of journalism, and compromises in either direction can be rationalized, but at bottom it is an irreconcilable conflict in which journalism will always lose.”
Read more here.