Rupert Murdoch was a busy man yesterday.
The top editor of The Wall Street Journal abruptly resigned just four months after Murdoch took over its parent Dow Jones & Company. And The Journal reports that his News Corporation is close to a deal to pay $580 million to buy Newsday from debt-addled Tribune Company.
Time broke the story on its Web site last night that Marcus Brauchli, the WSJ’s managing editor for less than a year, was stepping down.
The Journal fronts a poor and (thankfully for the author) unbylined story on its Marketplace section that doesn’t tell us anything about why Brauchli might have resigned—though it (and the Financial Times, for that matter) says the decision was “amicable”—and is careful not to offend Murdoch by raising the integrity questions that dogged him during the months-long takeover fight. But The New York Times on C1 quotes unnamed sources putting the lie to the “amicable” bit: “They differed as to whether he was being forced out as managing editor of the Journal, one of the most coveted posts in journalism, or leaving out of frustration.”
Since December, when Mr. Murdoch’s News Corporation bought Dow Jones & Company, publisher of The Journal, he has immersed himself in the newspaper’s daily operations and quickly made changes in its shape and style. Friends and colleagues say that Mr. Brauchli has been frustrated with some changes, and with the sense that he did not have the control over the newspaper that he was promised.
The Journal under Murdoch has turned into a more general-interest paper with fewer long-form, off-the-news front-page articles, and the NYT reports that Brauchli “questioned the shift.” He also fought a Murdoch plan to cull the editor-heavy paper’s ranks.
“This is a clear sign that it’s over—the Dow Jones culture is dead,” said one Journal staffer.
The FT says “Brauchli argued in private conversations that News Corp’s deep pockets would help to ensure the paper’s future in a rapidly changing media industry, and allow it to pursue long-standing goals with greater vigour.”
Whose long-standing goals will be pursued has never really been in question. The Journal reports that Murdoch man Robert Thomson, already installed as publisher, “may” take over as the temporary editor of the paper.
The Bancroft family, which sold Dow Jones to Murdoch last year, insisted on a fig-leaf “editorial independence board,” but the NYT says “even the people within Dow Jones who supported that pact said that it would be all but impossible to keep the new owner from having his way.”
About the closest the WSJ story comes to raising questions about the resignation is a cryptic eleventh paragraph that says “the committee is empowered to look into concerns about the editorial integrity of the Journal, according to a person who has reviewed the agreement.”
Is Newsday next for Rupe?
If Murdoch completes the Newsday purchase, it would consolidate his grip on the New York newspaper market, where he already owns the WSJ and the New York Post.
The Journal scoops on B3 that Newsday would be part of a joint-venture that would include the Post and says that the consolidated operation would move the Post from $50 million in annual losses to $50 million in profits as part of the new group. The WSJ says the newspapers would remain “separate products, at least for the time being.”
Tribune is weighed down by the crippling debt load it took on when real-estate tycoon Sam Zell took it private last year. That’s made exponentially worse by the severe advertising declines the company has seen at its newspapers and is forcing Tribune to sell off assets.
BoA hits a bump
Bank of America reported sharply lower profits in the first quarter and said the rest of the year is looking bad as consumers get hit hard. It took a couple of billion dollars in write-downs and put another $6 billion or so in reserve for future credit losses.
The Journal buries an interesting bit of info in the seventeenth paragraph of its C5 story: nonperforming assets more than tripled from a year ago to 0.9 percent of all loans.
Bloomberg does its own burying, not revealing the tidbit that 44 percent of Bank of America’s home-equity loans are in California, Nevada, Arizona, and Florida until the twenty-second paragraph. Good luck collecting those. Yet the bank says just 2.5 percent of them may be “uncollectible” this year. And wait until it takes over Countrywide in the third quarter.
“The first quarter was much worse than our expectations three months ago,” (CEO Kenneth) Lewis said on a conference call. “It’s too early to strike up the band and say that happy days are here again.”
Reading the Nat City tea leaves