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Friday, May 11, 2007

The Six-Billion Dollar Soapbox

Brad DeLong responds to Felix Salmon's comments on Rupert Murdoch's attempt to takeover the Wall Street Journal:

What Does Rupert Murdoch Think that He Is Doing?, by Brad DeLong: Felix Salmon thinks that Rupert Murdoch is crazy like a fox--like Fox News, that is. Salmon contends that Rupert Murdoch must intend to grow and enlarge rather than cut back the Wall Street Journal...

...It seems pretty clear to me that Murdoch would like to take the Wall Street Journal as a brand and expand it--new-media-ize it (and, perhaps, old-media-ize it through broadcast and cable TV as well). But it seems very likely to me that that is perfectly consistent with cutting back large parts of the current journal--cutting back the news reporters who write the long articles that bore Rupert Murdoch, and expanding the red-meat-to-those-who-hate-that-communist-Roosevelt audience. Worldwide the next generation is going to see a lot of rich people who will be willing to pay to be told that they deserve their money and that anybody who wants to tax or regulate them is an enemy of human freedom. And, as Murdoch has said before, that is a market opportunity--the opportunity he has tried to seize with Fox news, and may well try to seize further with a more propagandistic and less reality-based Wall Street Journal.

Can Murdoch make the financials work to make the Journal a good way for News Corp. to spend $6 billion? I doubt it. Can he find enough synergies to make the financials not be a total disaster? I think so. And in the meantime will it give him a platform on which he can play global statesman for a decade? Yes.

He could always start a blog.


Update: After quoting a Murdoch profile at length, Felix counters:

...This is, without a doubt, a portrait of a global statesman. Murdoch might not receive a lot of respect in the Wall Street Journal's newsroom, but he has had prime access to the most powerful people in the world for decades. Which is why I'm puzzled that Brad DeLong can write this:

Can Murdoch make the financials work to make the Journal a good way for News Corp. to spend $6 billion? I doubt it. Can he find enough synergies to make the financials not be a total disaster? I think so. And in the meantime will it give him a platform on which he can play global statesman for a decade? Yes.

This is the "return on ego" argument for why Murdoch wants to buy the Wall Street Journal, and to some small degree it surely holds some truth. But the fact remains that Murdoch is already a global statesman, and he has been one for decades. In fact, he has been the most powerful press baron in the world for many years now. Owning the Journal would, at the margin, increase his influence. But Rupert is not some déclassé billionaire with more money than clout.

As for the Journal's newsroom, I think that Murdoch would certainly shake it up - but he wouldn't cut it back. I think he would significantly expand the number of journalists that the Journal has overseas, and that he would turn the Journal's anachronistic front page into a must-read destination for breaking news, rather than giving over vast amounts of hugely valuable real estate to quirky magazine-style feature articles of no real import. Those are "the long articles that bore Rupert Murdoch," in DeLong's words, and frankly the vast majority of them don't belong on the front page of a daily newspaper, if they belong in a daily newspaper at all. The front page of a newspaper should be a home for news - and if that happens at the Journal, there's a good chance that Murdoch is going to need more journalists, not fewer.

    Posted by on Friday, May 11, 2007 at 12:06 AM in Economics, Press | Permalink  TrackBack (0)  Comments (45)

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