I’ve had a few people ask me what I think of Rupert Murdoch’s $5B bid for the WSJ. It’s not, of course, like I’m all that important in the matter, it’s partially because in the past I’ve voiced my concern about a few things Mr. Murdoch has done, like:
- offer Tony Blair a job at his company while Mr. Blair was running the UK, and mainly,
- saying something so revealing about his intentions and allegiance in a Guardian article, dated February 17 2003, a month before the disastrous sojourn in Iraq began. In it, Mr. Murdoch said:
Most revealing of all was Murdoch’s reference to the rationale for going to war, blatantly using the o-word. Politicians in the United States and Britain have strenuously denied the significance of oil, but Murdoch wasn’t so reticent. He believes that deposing the Iraqi leader would lead to cheaper oil. “The greatest thing to come out of this for the world economy…would be $20 a barrel for oil. That’s bigger than any tax cut in any country.”
He went even further down this road in an interview the week before with America’s Fortune magazine by forecasting a postwar economic boom. “Once it [Iraq] is behind us, the whole world will benefit from cheaper oil which will be a bigger stimulus than anything else.”
Last time I checked, Mr. Murdoch, the war hasn’t gone too well. And oil, assuming it should matter in the decision, is at record prices, because people like you led the country into it. So not only did “the greatest thing” not materialize, but the worst did.
One the one hand, if the Bancroft’s turn down a 66% premium, I’d say shame on them. But then, in the greater context of matters, shame on the Bancroft’s if they accept Murdoch’s blood-stained offer.
In the most recent issue of Business Week, there’s an interesting article on Murdoch, called Crazy Like a Fox, In it, the authors say:
Then there are the personal reasons. Murdoch mostly owns low- and middle-brow media properties—from the New York Post to Fox News. How satisfying to have in his hands the most respected business newspaper in America, whose editorial page meshes neatly with his own world view. What’s more, Murdoch believes he and his organization have a role to play in shaping the debate on the world’s pressing issues. He has strong views on taxes, war, domestic and foreign policy, and more. Murdoch has built his empire, in part, by assiduously courting the powerful. The Journal could be an invaluable tool of influence.
Maybe I’m too idealistic or naive, but if those are the stakes, then the Bancroft’s need to secure a restraining order against Mr. Murdoch’s ambitions for the world will be a worst place.
Here is his letter to the Bancroft’s:
May 11, 2007
The Members of the Bancroft Family
Dow Jones & Company, Inc.
1 World Financial Center
200 Liberty Street
New York, NY 10281Ladies and Gentlemen:
Please allow me the opportunity with this letter to address more fully why News Corporation would be an ideal partner for Dow Jones, and why we are so enthusiastic about a potential combination. As I stated to you in my letter of April 26th, nothing is more imperative than demonstrating that News Corporation would be dedicated to building upon the more than 100-year heritage of your great Company.
We are disappointed, as I imagine you are, that the details of our proposal and the discussion of the merits of a potential combination have become a matter of public debate. In the weeks since our proposal was made public on Tuesday, May 1st, there has been much written about a potential combination and News Corporation’s intentions. I would like to express my regret if you have been placed in an uncomfortable position by the events of the past week.
Much has been written about me, my family and our company, some flattering, some not; some accurate, most not. Please let me assure you that, first and foremost, I am a newspaper man. I don’t apologize for the fact that I have always had strong opinions and strong ideas about newspapers; but I have also always respected the independence and integrity of the news organizations with which I am associated.
Quite simply, the businesses of Dow Jones, and in particular The Wall Street Journal, represent American journalism at its best. Your record of journalistic independence and integrity is second to none. Any interference — or even hint of interference — would break the trust that exists between the paper and its readers, something I am unwilling to countenance. Apart from breaching the public’s trust, it would simply be bad business.
We at News Corporation know that the credit for building such an enterprise goes to the members of the family, a strong and committed Board and management team, and an editorial and reporting staff of the highest caliber. Our interest in Dow Jones comes from an appreciation of this tradition, one that runs in my family as well. My father, Sir Keith Murdoch, was himself a celebrated journalist, best known for uncovering the British debacle at Gallipoli in 1915. Upon his untimely death in 1953, I returned to Australia to go into the family business and subsequently expanded it to many newspaper titles over the next five decades. As a father myself, nothing makes me more proud than to see that my own children have inherited the passion that my father nurtured in me. They share with me a faith in the positive role that journalists play in society and in the future of newspapers to inform, educate and engage.
With this heritage in mind, I am pleased to outline my vision for what News Corporation brings to a potential combination. At News Corporation, we believe that investment in people, brands and technology are critical to maintaining a competitive edge and relevance with today’s consumer. In fiscal year 2007 alone, we will invest nearly $1.3 billion in capital projects, and considerably more than that in other growth and expansion initiatives. A large portion of this is allocated to the modernization of our UK newspaper facilities. We believe that News Corporation could bring substantial resources to bear in a combined enterprise, providing the additional capital and scale that will preserve Dow Jones’ leadership and growth for generations to come. We have considered below a number of potential avenues for further investment behind the Dow Jones family of businesses:
• Commit to continue to promote journalistic integrity, at Dow Jones and in the world
Maintaining the heritage of independence and journalistic integrity of The Wall Street Journal and Dow Jones’ other publications would be of utmost importance to me and to News Corporation.
• Establish an independent, autonomous editorial board exactly along the lines of what was established at The Times of London. Creating such a Board would ensure that (1) both the Editor and the Managing Editor of The Wall Street Journal would not be appointed or dismissed without the approval of the majority of the directors of the Board; and (2) ensure that any dispute between management and editors is properly arbitrated by the Board.
• Increase funding and support for the Dow Jones Foundation to continue to promote journalism standards and press freedom around the world.
• Commit to ongoing involvement of the family in the combined business of Dow Jones and News Corporation
I would appoint a member of the Family to the Board of News Corporation
• The family has been an excellent steward of Dow Jones for many generations.
• I would hope that including a family member on the Board would help alleviate any concerns about maintaining journalistic integrity and ensure good communication between the family and News Corporation going forward.
• Leverage News Corp’s International Presence and Expertise to Expand Reach of Dow Jones’ brands in under-served markets
News Corporation would leverage its significant global resources and platforms to drive international growth and expansion of the Dow Jones and Wall Street Journal brands.
• Expand where appropriate Dow Jones’ editorial presence in emerging Asian markets, including India and China.
• Utilize News Corp’s distribution platforms in Asia and Europe to better promote and market Dow Jones’ products and services.
• In Europe, News Corporation has such a large presence that anything less than a leading market share for The Journal would be a disappointment.
• Reach a broader domestic audience by expanding the content base
In the U.S., where Dow Jones and The Wall Street Journal already have a strong heritage and consistent success, we would also make necessary investments to grow the business, particularly at The Journal’s Washington, DC bureau.
• Invest in digital media and utilize News Corporation’s capabilities to enhance value
Dow Jones is already a leader in content and digital media with three of the world’s leading paid-subscriber financial news sites. We would enthusiastically build upon this success by leveraging the scale we have built in digital media.
• Honor the tradition of partnership for Dow Jones’ greatest asset, its people
I would not have considered an offer without the full confidence and knowledge that Dow Jones and The Wall Street Journal are served by the most dedicated and accomplished team of journalists, editors, management and other employees of any media organization.
• Retaining this team would be a key priority for News Corporation.
• We would also invest in the The Journal’s headquarters to ensure it remains a state-of-the-art facility that promotes and encourages easy access between management, editors and reporters.
I understand the magnitude of the decision you are facing. I hope you find our proposal an indication of the great hope I have for Dow Jones’ future. I trust you have a better understanding of my commitment to preserving and building upon your legacy.
I would welcome an opportunity to meet with members of the family, the Board, management, and the newsroom to review our proposal in further detail. Thank you for your consideration.
Yours sincerely,
Rupert Murdoch
Taken from WSJ, ironically. Reaction around the Web here.
Disclaimer: Mr. Murdoch was my boss when he bought the company that bought my company. For six months, it was magic, even though I never met him.
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WatchMojo NewsletterJust because a report says that something is doomed to fail (and I said so previously) does not mean it’s true. After all, just a few months ago, a bunch of reports came out arguing for bullish figures on video download sales. Of course, at the time, I said that was rubbish, and my argument was based on exacly what we saw with text content from 1994-2003.
Anyway, today a new report by Forrester came out saying that there’s “No Future For Paid Video Downloads.”
This report could be as wrong as the previous one, but the fact is that both can’t be right. My gut says that ads will drive video much like ads drove text content. But hey, who listens to me, anyway?
So here we are, spending a trillion dollars and countless lives exporting freedom of expression and press (amongst others) to the world, and those who are paying the price won’t be able to access social networks and the largest entertainment site, because we can’t afford it.
Freaking ironic. Read more.
Are the rumors true? I just spoke to Howard Lindzon (as a fellow investor, video content producer, we’ve had some exchanges on the future of web video) and he said, and I quote: “I don’t start the rumors, and I don’t comment on them.”
Take it was you wish, but if the rumors are true, then CBS just bought his Wallstrip for a reported $5M.
If it’s true, then good for him and his team.
As a video producer though, it’s nice to see broadband video getting its due. Wallstrip is a vertically focused finance content producer, the type of site a WatchMojo.com would partner with, for example. WatchMojo.com is very different in that we go for a broader content base covering all categories of interest to advertisers.
I won’t comment on whether $5M is too low or too high, I’m not into second guessing on rumors, when the numbers are made public, I’ll comment (assuming it’s the real deal). But some observations as a fellow content producer:
- WatchMojo.com is by far one of the largest content producers in terms of broadband platforms, with a library of 4,000 1 to 3 minute video clips. We have content on everything imaginable: fashion, food, video games, cars, sports, travel, and much more.
- WatchMojo.com has built one of the largest syndication networks of any online-only video producer: we’re one of the few online-only producers on Joost, as a few others I can’t name yet, even though they might be live. Last year we did over 1M streams on YouTube, this year we might do 10M. One syndication partner’s revenue grew 30,000% in 3 months, etc. If you line up all video portals, we’re on all of them, in 3, 6 or 9 months when people look at reach of video content throughout the Web’s leading video viewers/sites, trust me, we’ll be pretty darn close to 75% penetration if not more.
- we’re creating custom video for media companies and ad agencies.
Wallstrip apparently does little or no revenue, we were profitable in Q1, 2007.
All to say, I have been self-financing this company for what seems to be like forever, and I love that fact.
I sold $8M worth of ads in my old job and trust me, no one will be able to monetize video content like we will. We’ve started in fact.
I have no idea if the rumors that CBS just bought Wallstrip for $5M is right on, but regardless, it does once again validate what I’ve been saying all along, and what CBS Interactive CEO Quincy Smith confirmed when I was at the Economics of Social Media, made-for-web video content’s value is growing quickly, rising fast. CBS has all of the content in the world from TV, but what compelled them to plunk over $5M for Wallstrip?
Anyway, also worth reading from previous stuff I’ve written:
Is Digital Content the New Software?
http://www.watchmojo.com/web
Understanding TV execs angst and envy:
http://www.watchmojo.com/web
The Commoditization of Distribution and Scalability of Content
http://www.watchmojo.com/web
Are VCs jumping on broadband content bandwagon:
http://www.watchmojo.com/web
Last night I posted that we’re in talks with media companies and VCs are finally knocking on our doors… thanks Howard, you just gave me one more ace to play with…
I won’t comment on that any more, though many are, and some in-the-know are correcting a few inaccuracies, so not 100% if the story is true… but if it is, CBS’ Smith is one aggressive dealmaker, when he said “we don’t compete with Fox, we compete with LonelyGirl,” he wasn’t kidding.
