Current CEO Peter Kann and Wall Street Journal publisher Karen Elliott House, who is married to Kann, will both be leaving the company, it was announced today. Kann will be replaced by Richard Zannino, who is currently the chief operating officer. You can read the full release here.
Dow’s stock is up on the news today, but other than the positive earnings guidance for the fourth quarter given in the news release, I do not see this announcement as a positive in the world of business journalism. Here’s why:
Kann and House are both former Wall Street Journal reporters. The company has had a history of promoting JOURNALISTS, not business executives, to the top spot within the company. Zannino, if I am correct, is the first non-journalist CEO to run Dow Jones in its history. He brings to the corner suite a different perspective on how the company should be run, I’d imagine. I think this quote from the press release was specifically put in there to quell any fears within the Dow Jones’ newsrooms: “Although I’m not a journalist, I strongly believe that, for Dow Jones, journalistic excellence and business performance are mutually reinforcing — and I am deeply committed to both.”
At a time when newspapers and all forms of media are being pressured by Wall Street to produce higher profits by cutting costs, this seems like the first step in placing Dow Jones down the same path as Knight-Ridder, Tribune Co. and other newspaper chains currently cutting back in the newsroom.
This change marks an important event in the newspaper and company’s history. In the last 75 years, no media outlet has done a more comprehensive, broader or better job at documenting the ins and outs of the business world and the economy than The Journal. While such a statement may not seem surprising to those who read the newspaper and know that it is considered a must-read by most executives and important people on Wall Street, the newspaper’s standing as the pre-eminent business journalism publication was not always the case. It was embarrassed by reporters taking pay in return for favorable coverage in the 1980s and in the 1920s.
Because of its success, the paper has been receiving increasing competition from other newspapers. Dow Jones and The Journal, responded in the past, but whether that will continue is up to Zannino. A one-section publication since its founding in 1889, the flagship newspaper expanded to two sections in 1980 and then added a third section in 1988. The second section was called Marketplace, while the third section was called Money & Investing. The Asian Wall Street Journal started in 1976, and a European edition followed in 1983. It stretched its operations overseas in other ways, joining forces in 1967 with the Associated Press to transmit business and economic news in dozens of countries. The company also acquired a chain of small-town newspapers, a book publisher and other business interests. Smart Money, a personal finance magazine, started with Hearst Corp. And a syndicated television show has run nationally since 1982.
The Journal’s business journalism remained strong, although critics note that it was behind competitors on several major stories – and missed several others altogether. Author Francis Dealy points out that The Journal missed the major stories that resulted in the savings and loan scandal of the late 1980s as well as the Michael Milken junk bond scandal during the same time period. Others criticized the paper for downplaying the excesses of the decade of the 1980s in the business world. And like its reporting on the 1929 stock market crash, The Journal’s coverage of the October 1987 drop in the market – the largest single-day drop of the Dow Jones Industrial Average ever – was overshadowed by reporting in the New York Times.
The first year or so should show whether Zannino’s tenure will change the business journalism practiced at Dow Jones and the WSJ. Rumors have been flying that the Bancroft family, which controls the company, would like to sell out. Maybe Zannino’s job is to spruce it up for an acquirer.
