Murdoch will end up selling WSJ for a loss

Bloomberg News columnist Michael Lewis writes Tuesday that News Corp. CEO Rupert Murdoch — or his heirs — will wind up selling The Wall Street Journal for a loss years later if he is able to purchase its parent company, Dow Jones & Co., from the Bancroft family because of how the Internet is changing the newspaper business.

Lewis wrote, “The wonder is that a man who swims as well as Rupert Murdoch would want to jump on. It’s true the Wall Street Journal would be fun to own, just as the New York Yankees would be fun to own. But the Journal isn’t the same quality of status good as the Yankees. Indeed, if the quality of the great newspaper’s allure was the same as that of a pro sports franchise — or a great work of art — there might still be hope for their future. A rich man might buy the Journal or the Times and take his dividends in glory. The status of owning the thing would justify low returns on his capital, or even actual losses, in perpetuity.

“But there’s a catch to the status of even great newspapers: When they lose their readers they lose not just their profits but their purchase on the culture, and the source of their prestige. It’s only a matter of time before even Murdoch wakes up and realizes that the Wall Street Journal is not as glorious as he remembers. And what then? He — or his heirs — will want out. They’ll sell it, at a big loss, to some lesser figure. (Inferior status goods attract inferior status-seekers.)

“The Bancrofts won’t believe it now but there may come a time when they long for the days when their baby was in the hands of such a fine and upstanding press baron as Rupert Murdoch.”

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