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.