Audit notes: News Corp.’s board, Lehman’s hubris, Awards and Slideshows

David Carr eyes Rupert Murdoch's crony-filled board of directors

David Carr takes a look at the News Corporation board of directors, which is as stacked with the CEO’s cronies as any board out there—and that’s saying something:

Like many media companies (including the one I work for), News Corporation has a two-tiered stock setup that gives the family control of the voting shares. The current board includes family members and several senior executives; the independent slots are filled by a host of familiars.

Viet Dinh, a former Bush administration official, is godfather to Lachlan K. Murdoch’s son. Roderick Eddington was deputy chairman of a division of the company in the late 1990s. Andrew S. B. Knight and Arthur M. Siskind are both former senior executives, and John L. Thornton, the former Goldman Sachs president, served as an adviser to News Corporation on several major deals.

The board also includes Natalie Bancroft, a trained opera singer who made a great deal of money when her family sold Dow Jones, which included The Wall Street Journal, to Mr. Murdoch in 2007, and José Maria Aznar, a former prime minister of Spain, who is a friend of Mr. Murdoch’s.

— Bloomberg View’s William D. Cohan writes that the Lehman emails disclosed recently show that CEO Dick Fuld and his lieutenants were well aware of the many problems forming in the markets, but were “blinded by their hubris”:

The records confirm, yet again, that the “forces-out-of- our-control” argument we hear from Wall Street leaders is bunk. It is the ill-advised behavior of one banker after another, day in and day out, that leads to the sort of devastating financial crisis we are only now emerging from.

For instance, at a Lehman board meeting in September 2007, according to a copy of the presentation in the data cache, Lehman executives presented a clear summary of the brewing crisis. “The initial tremors were felt at the end of 2006,” the board was told, “when the poor loan performance of sub- prime borrowers began to be a cause for concern in the marketplace. This was evidenced by a gradual spread widening in the asset backed index.” The presentation continued: “The market continued to widen as it became apparent that the performance problems in mortgage loans was not going to abate and was no longer limited to the sub-prime market but also affecting the Alt-A product.”

The Atlantic’s Alexis Madrigal takes on the idea that slideshows drive traffic, which most recently popped up when Ad Age reported that the president of the Washington Post told some of his top reporters to think less about awards and more about slideshows.


Instead, they are seen as a cheap and fast way to produce “traffic.” The problem is that they are not producing “traffic” — which in any other context would mean the number of people in a space — they are producing page views. This is not a simply academic distinction. The company’s president is calling on his workers to juke the stats, effectively. These companies want you to think that more pageviews equal a larger, more engaged audience, but that’s a quantitatively and qualitatively shaky proposition.

Quantitatively, sites vary widely in their page views to visitor ratios, and I can tell you from experience that it is much, much easier to drive up the former than the latter. So, when companies are in trouble, what do you think they try to do?

If you’re trying to juice page views, your staff will ineluctably be forced to make galleries. Where else can they get a 10x or 20x multiplier on their work? I can guarantee you that will not help you break the kinds of stories or do the kinds of analysis that will keep people coming back. Not only that, but it’s demoralizing to your best people, the ones who want to be out there producing their best work.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,