Today, a monument to Telerate sits in South Brunswick, New Jersey, in the form of a vast and mostly empty office complex built for the now defunct data-provider. Walking through South Brunswick is like visiting the set of “The Omega Man,” the 1971 Charlton Heston movie about the earth’s population being wiped out by biological weapons. The buildings are there, but all the people are gone.

A more symbolic but telling venture was WBIS, also called, “S+,” an over-the-air business-and-sports TV channel in a joint venture with the conglomerate ITT Corp. The station’s slogan—“Sports, money, and, oh yeah, life”—was much mocked by us newsroom know-it-alls, but in fact it did foreshadow the corporate humbug that would come to mark even mundane internal communications.

One day, I was riding up from the newsroom on the tenth floor to the cafeteria on the fourteenth. The elevator stopped on eleven — ding!—and about two dozen chattering twenty-five-year-olds, new WBIS employees, shuffled on. That happened every day until July1997, the day the elevator opened onto a gutted twelfth floor. The reception desk was gone and wires dangled from the ceiling panels. A single maintenance worker got on. Ding!

In the wake of Telerate, etc., dissident members of the Bancroft family, which controls DJ’s voting shares, began to speak up, with some calling for Kann’s ouster. One heir, Elizabeth Goth, was quoted as saying—correctly—that the problems at Dow Jones were more systemic and more deeply rooted than one troubled unit. “There is a history with this company,” she said. “We have had questionable outcome after questionable outcome in various business deals.”

This is 1998.

Defenders of Kann, who didn’t reply to requests for comment, will say that this is all old news, and it is. They will also say he deserves credit for launching Weekend Journal, Personal Journal, and the database company Factiva; for making the online Journal a pay site, redesigning the paper, and other measures. And they’re right.

But as they say on Wall Street, all that’s not going to move the needle, generate enough earnings to make a difference and build the financial base to support the Journal through down ad cycles and difficult industry transformations.

Look, I don’t say being CEO of Dow Jones is easy.

But to me, the most regrettable chapter wasn’t Telerate, but repeating the mistake of underinvestment during the late-1990s tech bubble, when financial-service and tech ads made the Journal on some mornings as thick as a phone book.

Don’t take my word for it, ask Zannino, who is talking here about investing to spread out the paper’s advertising beyond financial and tech ads, but might as well have been speaking more generally. “In hindsight, sure, it would be hard for me not to say we should have been diversifying (our advertisers) back then. Next time.”

He said that to Newsweek in 2003, when he was DJ’s relatively new chief operating officer.

And while DJ was nibbling around the edges, trying to squeeze both growth and dividends out of a single newspaper and a handful of other stuff, mostly by beating the staff like so many rented mules, others acted like capitalists—you know, “free markets, free men,” and all that.

In the early 1990s when Kann took over, Thomson Corp. was a newspaper company that had expanded into textbook and law book publishing. In 1996, it bought West Publishing. Last year, its legal division alone posted operating profits of $1.1 billion, ten times that of all of Dow Jones. True, it sold off its newspapers in 2000, but it certainly could have supported them during this transition from print to digits.

Now, guess what? It’s buying Reuters, a news service and financial data provider. With Reuters, Thomson gets the last viable competitor to Bloomberg and the ability to pressure Dow Jones Newswires, one of DJ’s few remaining profitable segments. And if you think the old Thomson papers could even approach the Journal’s readership demographic, you have a strangely high opinion of the Guelph Mercury or the Fond du Lac Reporter.

In recent years, DJ’s culture seemed to curdle as the company stagnated financially. In 2002, Kann named his wife and another former reporter, Karen Elliott House, publisher—that is, the chief ad salesperson. Senior management grew more remote, and cost-cutting came with an unnecessary helping of monkeyshine. Kann once referred to the end of DJ’s great pension program as a way to “modernize” it; the shrinking of the physical size of the paper would be called a “design enhancement” or something. WSJ staff writers were reduced to appeals to the board’s conscience with stories about relatives saved by DJ’s soon-to-be-cut health benefits, impassioned letters from war correspondents and marching around a big inflatable rat (1). That’s embarrassing, let me tell you.

In April 2005, what I believe was a revealing moment arrived. After years of overpaying the dividend to the benefit of the controlling Bancrofts—in effect, his patrons—Kann supported a corporate rule change that lowered the number of super-voting shares to 7.5 million from twelve million, allowing the Bancrofts to retain voting control of the company even as they sold large blocks of stock.

The family said it needed “to provide funds for investment diversification and to meet anticipated financial needs.”

Ah, skip it.

Last year, the company reported that it took a charge of $4.5 million for Kann’s severance as part of $14 million in charges it took for senior executive severance, include Kann’s wife’s.

Is that a lot? Not really. But it’s more than Dow Jones had in cash on its balance sheet at the end of last year.

In the end, I’m afraid Peter was right. By laying fact upon fact, truth is attainable.

(1) See: “Dow Jones Employees Protest,” New York Post, April 21, 2004.

• 1
• 2