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Preview: RealClearPolitics - Articles - Ed Lasky

RealClearPolitics - Articles - Ed Lasky





Last Build Date: Mon, 21 Jan 2008 08:30:28 -0600

Copyright: Copyright 2008
 



Murdoch Takes on the New York Times

Mon, 21 Jan 2008 08:30:28 -0600

While the company has suffered from poor management under its Chairman and publisher, Arthur Ochs Sulzberger, Jr ("Pinch"), he has been insulated from pressure by shareholders (including a hedge fund that accumulated millions of shares) because of an unusual voting class structure that vests enormous power -- but little ownership -- in the founding family. However, Pinch will soon face a very formidable competitor. Legendary media baron Rupert Murdoch has just completed his purchase of the Wall Street Journal - a paper that also enjoys nationwide reach, but one that has heretofore focused on the world of business. Change is afoot. Murdoch is a man who makes no "small plans"; he makes "big plans". Moving in on the Times Murdoch's goal is to transform the Journal into a rival of the Times, and then surpass it, making the Journal the nation's preeminent general interest newspaper. Given Murdoch's history, zeal, resources and talents -- all qualities sadly lacking in the fourth generation of Sulzbergers, as symbolized by Pinch -- the Times will be toppled. The downfall of the Times was almost pre-ordained once family members placed Pinch Sulzberger in control of the paper. He had no real world experience to prepare him to lead the Times. He had two brief sinecures working for other companies (he was a reporter with the Raleigh Times and the London correspondent for the Associated Press) before joining the family paper. Once he was "promoted" to be both the publisher and Chairman of the Board (duties that many believe should be divided between two people for ethical as well as business reasons), he was uniquely positioned to do double the damage to the paper. And damage he has done. Indeed, his greatest "accomplishment" seems to be his ability to drive the paper and his extended family fortune into the ground. His managerial failings have been repeatedly chronicled in a series of American Thinker articles; the descent of the paper is graphically displayed by the decline in its market value. While all newspapers have been beset by a series of challenges (declining readership, advertising dollars departing for the web, the rise of other media outlets), the Times has suffered disproportionally more damage than its peers. As the last year came to a close the New York Times Corporation was hit by a flurry of rare sell recommendations by investment banks across the nation and (showing his investment prowess, Sulzberger has been selling his own shares as the stock hits its lows). In contrast, another prestigious diversified newspaper, the Washington Post, has held up rather well. Donald Graham, also an heir to the family enterprise, has been an unassuming leader: he appointed someone else to be the publisher and CEO of the paper, the paper has diversified wisely (ironically, the paper has benefited enormously from its venture in private education -- a step that the Times would be unlikely take given its liberal proclivities), and the Graham family has welcomed the wise counsel of legendary investor Warren Buffett. As shown by Pinch's cavalier treatment of activist investors who have pushed for change at the paper, he does not seem to have learned to accept criticism or guidance. There has been all too little of the type of checks and balances at the Times that the paper advocates for our government and for other corporations. Sadly, the Washington Post has never chosen to challenge the Times on the national level as a general interest national quality daily. The Journal will. It already has a higher circulation base than the New York Times, but it has focused on financial coverage and has lagged in attracting advertising aimed at general conmsumerss. If it expands its coverage and becomes a general interest newspaper, it might make dramatic gains against the Times, which relies on subscribers outside New York City for half of its circulation. (Tellingly, the Murdoch-owned New York Post has a circulation greater than that of the Times in New York City.) Rupert Murdoch has the potential to dramatically weaken the Tim[...]