Categories: OLD Media Moves

WSJ's slim profits make it vulnerable

Richard Perez-Pena of The New York Times writes that the Wall Street Journal’s slim profits, compared to other papers, is what makes parent company Dow Jones & Co. vulnerable to a takeover offer such as the $5 billion bid from New Corp.

Perez-Pena wrote, “In part, The Journal’s recent struggles can be attributed to its longstanding commitment to high-quality journalism that translates into high costs, and to the particular pressures felt by a business-oriented newspaper.

“But they are also the result of some management decisions to expand during the late 1990s boom, high turnover in the paper’s ad sales department and recent attempts to broaden the paper’s advertising base with the Saturday issue.

“The Journal and its Web site account for most of the consumer media group, which makes up about 55 percent of Dow Jones’s revenues. As a whole, the group posted a slight operating loss in 2005 and a positive margin of 3 percent last year, despite unusually strong ad sales — and analysts say the margins for the Journal were probably worse.

“Yet even in unsettled times, with newspapers unsure of their futures, many still rack up healthy profits.”

Read more here.

Chris Roush

Chris Roush was the dean of the School of Communications at Quinnipiac University in Hamden, Connecticut. He was previously Walter E. Hussman Sr. Distinguished Professor in business journalism at UNC-Chapel Hill. He is a former business journalist for Bloomberg News, Businessweek, The Atlanta Journal-Constitution, The Tampa Tribune and the Sarasota Herald-Tribune. He is the author of the leading business reporting textbook "Show me the Money: Writing Business and Economics Stories for Mass Communication" and "Thinking Things Over," a biography of former Wall Street Journal editor Vermont Royster.

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