Wall Street Journal Doesn't Get Redistributing Wealth Which Is The Problem

The Wall Street Journal's opinion section is at times not the best place for intelligent pondering.  I know that's a terrible remark, but I write that for a reason: the lack of circular, systemic thinking.   The WSJ writes that having a non-refundable tax credit, which is something that can't be taken back -- it's a grant of sorts (I prefer an outright subsidy check) -- is bad thing.

Here's what the rest of us are thinking.

We just have AIG Insurance $120 billion (not million) to save it's corporate hide and several of its execs go out on a retreat at a luxury resort valued at over $400,000!   What's that?  It came from our government!

That opinion "work" is a piece of work, and shows why the rest of America is so angry with Wall Street.  The WSJ is not helping the political needs of the Street and should just back off on the rhetoric, at least untill we're way out of this mess.

NFL COMMISSIONER ROGER GOODELL WITH WALL STREET JOURNAL

NFL Commissioner Roger Goodell With Matt Futterman, Wall Street Journal August 14, 2008 Q: Do you go into a season with the mindset of what story you want to tell? What is the big picture for 2008? Commissioner Goodell: No, I think that’s the great thing about football. I’ve said it repeatedly before. We’re the ultimate in reality television. We don’t know what the story is. Stories will unfold. We never would have been able to anticipate the Brett Favre story 45 days ago. Stories develop as the season goes on. Young players come through and perform, whether through injuries by somebody in front of them, or whether they just come in and perform at extremely high levels. I think that’s one of the things that makes the game so great – the unexpected always happens in the NFL. Does last season’s success translate into an improved bottom line? Is there a direct correlation if there’s a huge amount of attention on the field with great stories, or is your reputation pretty well locked in place? It’s not a direct or immediate benefit like that. What it really does to us is it just continues to grow the popularity of our game. When you can have the size of the audience that watched the Super Bowl last year be able to be so entertained and so excited by that game, it carries over into the next year and it develops new fans and it gives people another way to get involved with our game. And that’s what we’re in the business of doing – growing our game. On the current situation with the owners opting out of the CBA and taking the position that the players have been given too much revenue: I don’t look at it like that. I look at it as the labor agreement, when you negotiate a labor agreement, has to work for all parties, in this case, the owners on one level and the players on the other level. And it wasn’t working for the owners. And that’s why they took the step to say, let’s trigger out, which was an option they had, and let’s make sure that we start addressing the issues to make sure it works for all parties. And that’s simply what they did, and so that starts the clock and gives us the ability to start negotiating so that we can address the issues of what wasn’t working for the owners. Of course, if the players have issues that aren’t working for them, we’ll look at that also. But the reality of it is, the labor agreement has got to be flexible enough to address all of these issues and make sure that the game stays strong. In the past would you say the owners have been satisfied with the status quo and generally pleased before this labor agreement? I don’t know if I’d say that. I think there’s always been a give and take in the previous negotiations. It’s a structure where there are different forces at play during a period of time in any agreement, and the forces now are becoming pretty extraordinary. We have significant economic conditions that are changing the environment for owners and for every other business, by the way. Consumers are feeling it directly. We’re all feeling it. So there are factors that we’d have to consider there. There are risks in the marketplace as a result of that that changed the economics for the owners. There are aspects of the arrangement that just aren’t working for the owners that need to be addressed as soon as possible, and that’s why we terminated now. Is big-market/small-market discrepancy at the root of some of this owner dissatisfaction? No, those are two different issues. That was something that got mistakenly mixed together in the last negotiations. Those are two separate issues. The NFL has the greatest amount of revenue sharing of any professional sports league, and it’s one of the fundamental aspects of our league, of why we continue to be successful and why we continue to be the leader in professional sports; because we have done revenue sharing in an intelligent and responsible fashion for all clubs, and it allows all our clubs the ability to be able to get the revenue to compete. The labor issue is, simply, are the labor costs too high? So you’re getting dispute about the labor costs being too high for high-revenue or low-revenue clubs. It’s not working for the majority of clubs, which is why we had a 32-0 vote. So I don’t mix those two issues. We will always look at revenue sharing. We have looked at revenue sharing. We share all of our national revenue equally. We share our gate on a 1/3-2/3 basis, and even some of that is pooled equally in terms of visiting team shares. So I think there are a lot of things that we do very intelligently in our revenue sharing. We have continued to make modifications to that, and we will. But this is about the labor costs. Does the revenue sharing have to be fixed as much as the labor costs do? No. You always modify the revenue sharing based on where we are as a league. Where are the revenues coming from? Are they coming from local or are they national? You obviously have to keep your eye on that and make modifications as you go. We did that when we realigned the league several years ago. What we did is we essentially pooled the VTS, so there were no financial ramifications by realignment. That was an intelligent thing to do and allowed us to make the best possible decision for our fans on how the league is aligned. That’s the kind of intelligent decisions we make on a regular basis so that revenue sharing continues to be one of the fundamental aspects of our success. How important was it to you to get Brett Favre back on the field once he said he wanted to play? I think you have two things here. One is if he decides he wants to play, he has certain rights as a player wanting to play. At the same time, the Green Bay Packers have rights. They held his rights as a player. So they had competing interests there. They had equal rights which needed to be resolved. I was interjected at one level because of a tampering rule, but I was also interjected from the standpoint of he had to be reinstated by the commissioner. I wanted to make sure both rights were respected and that they reached some kind of a compromise that they both felt comfortable with. I don’t make a decision about who signs him or who doesn’t sign him; once he went back to the Packers, they resolved that matter between the two parties, which is the way it should be. Does it feel good knowing Favre is still part of the equation, in terms of being on the field after his great season last year, and the fact that he’s been a face of the NFL for a decade or so? Sure. Having Brett Favre on the field playing in the National Football League is great for us. I’m very direct about that. If he wants to play, it’s a great thing for the NFL, so we welcome him back. But as far as the rights between the team and the player, those are issues that have to be dealt with on the club level. That’s not something the commissioner directly gets involved with, other than to make sure that our policies and procedures are properly respected. Is your biggest frustration these days the NFL Network? I wouldn’t say it’s the biggest. I would say that it’s frustrating for us because we think we have very compelling product and we know there’s demand from our fans. We hear it repeatedly, and we’re looking for broad distribution of the network. We think it’s important to us strategically over the next several years, but more importantly, it’s about delivering more football to more fans. We would like to get that broad distribution and we’re working hard trying to figure out the best way of doing it. You’ve been making the same argument for the NFLN that a lot of independent channels have been making for a long time. Is there a sense two to three years into it that this argument for broad distribution of the network isn’t going to get anywhere? No, I wouldn’t say that. I think, if you look back at the history, and I’m not an expert as it relates to distribution of cable channels, but it’s not unusual that you have these types of disputes among cable operators and programmers about how they get distribution. So I don’t find that terribly unusual in this industry, from what I’ve observed. We just find it unfortunate the consumer, our fans, are losing at this point in time because they’re not getting this high-quality entertainment, and that’s what we want to try to resolve. We’re going to look at various ways of being able to do that, whether it’s improving the content and the product; how we can make the NFL Network better so we can get the distribution that we believe it deserves. Has it been a money-losing proposition for the NFL so far? No, that’s not the issue. We’re making money on it. Our issue is getting broad distribution so our fans get to see our games. That’s another fundamental aspect of our media policies – to make sure that our games are available to the broadest possible audience. That’s what we’ve done successfully with broadcast television. We’re one of the few sports leagues to be able to continue to place product on broadcast television. We want all of our games, when they appear, not to be in 40 or 45 million homes. We want them in 80 or 85 million homes. It’s proven that our content has that kind of demand. Its ratings and its audience levels are very consistent with the most popular programming, if it’s not the highest programming, in all of entertainment. That’s why we believe there’s demand for our product. If you want to get the broadest distribution, why not just make a deal with ESPN? RG: It depends on what deal you’re talking about with ESPN. What we’re looking for is to get the broadest audience with the best-quality product. We’re looking at what we can do to make this the most attractive programming and most attractive content out there. It has to be done in an intelligent fashion because this is an important strategic asset for us. We want to have something that talks about football 24 hours a day, 365 days a year. We’re not talking about something that’s promoting other sports or other entities. We’re talking about something where people can go to find football 365 days a year. Is it something you think can be solved in the near future? I don’t know. I sure hope so. We’re working towards it, but again, this is a long-term strategy. We’re going to continue to negotiate and try to find creative ways to make sure we get this distribution, and we’ll do it as fast as we possibly can because we know the consumers want it. But we’re only one side of the party here. Is it difficult to keep your eye on that long-term strategy in the face of the short-term headaches? No. I think the most important thing for us to do is always keep the eye on the long-term. The National Football League was not built in a short period of time, and its success is really reliant on us making sure we continue to keep the long-term focus on our challenges and our opportunities going forward. In terms of going forward and how people are going to consume the NFL, and new media, including internet strategies, do you see games being digitally delivered down the road, or would that take too much away from the valuable broadcast packages? The premise is to continue to be successful on broadcast television. What we’re finding with various experiments going on with digital media, whether it be the recent experience with the Olympics, or what we hope to be able to determine through our experiment with NBC this season, are that these digital media opportunities are supplementing and adding to the audience for broadcast television. It appears in the short-term that may be a very positive development. So that would be a reason why we would continue to do these experiments – to learn more about it and learn how we can use these technologies to be able to broaden our television audience. So you’re trying to prove to the broadcast networks that digital media wouldn’t detract from the broadcast audience, but potentially add to it? Again, the fear always is that these are going to detract from the broadcast audience. It doesn’t appear to be the case. In fact, what it does is create greater interest in the broadcast. So what we’re looking toward is what it is we can do with our digital media assets to broaden that audience, to create more excitement, to create more interest, so that we broaden our broadcast audience and become more successful on broadcast television. The broadcast outlets are always going to want more. Are you in a position where you’re going to be able to give it to them? There’s been talk of shortening the preseason and extending the regular season. Do you think you’re heading down that road? That’s a little different. What we’re trying to do is make sure that all of our content is high quality, and it meets the standard of what we think the excellence of the NFL content is. So what we’re looking at is whether the preseason is really that high quality that we expect from NFL programming, and I don’t think it is. So what we’re looking to do is say, can we convert some of that programming into high-quality regular-season programming? We play a 20-game season right now – 4 preseason and 16 regular season. We’re evaluating whether we’re better off with a 17-3 ratio or an 18-2 ratio, again, to improve the quality of that content even further. And it does provide more content in that fashion. Do you have a preference for which way it would go – would you start before Labor Day or go longer? Interestingly enough, we do have the option to move the Super Bowl later. The current analysis would indicate that we would go after Labor Day, a week later in the season or two weeks later in the season. So you’d stick with starting it when you do now? Yes. That’s when football season is. We celebrate the start of football season with Kickoff when we come back from Labor Day and everyone’s done with summer vacation. It’s football season. Do you have to end the season by the Daytona 500? No. Our view is, when we’re getting into that late season, we really own that calendar, and that’s an opportunity for us to continue to build our game. Do you see a team in London or Paris by 2025? Very possibly. Our experience in London in the short-term has been extremely positive. We played our first regular season game there last year. The mayor told me we could have sold the game out ten times over, and that’s in a 90,000-plus seat stadium. We came back again this year with another game and we sold out the tickets in, I think, an hour and a half. We have a tremendous interest and a tremendous fan base over there. We have great media interest over there. So I think that’s a marketplace that clearly could support an NFL franchise, and that’s one of the things that we’re looking at. How do we continue to play more regular-season games over there and develop that interest so that it could handle a franchise at some point in the future. Would an overseas franchise go to London first? I wouldn’t foreclose it. It could go someplace else, but the UK is a very developed media market and a very developed NFL market. We have a strong fan base there. So I would think that’s probably the leader in the clubhouse. In the shorter term, could there be an NFL team in Canada? I don’t know. Right now we’re doing what we can to try to broaden the fan base for our Buffalo Bills. Several years ago we worked to regionalize that team in western New York. It’s been very successful, but as that market continues to have challenges, we’re looking to see how we can broaden it even further. So they’re playing a game in Toronto, as a matter of fact, this evening, and there will be a regular-season game later this year there. That has really helped the Buffalo Bills be stronger in Buffalo, and that’s what we’re hoping to do. But it’s also reached out to another set of fans that we know we have in Canada that are able to come and attend a game in Toronto. Being from the Buffalo area, is it a high priority for you that there always be an NFL team in Buffalo? I think it’s a high priority for us to make sure all of our teams are successful, and we look to see what we can do to make them successful.   ###

Wall Street Journal On Barack Obama And His Appeal To Black and White America

A classic and uplifting article that should be read by all Americans. It's a great window on how America has improved as a country.

Whites' Great Hope?
Barack Obama and the Dream of a Color-Blind America
By JONATHAN KAUFMAN
November 10, 2007; WSJ

Portland, Maine

Isaiah Oliver, a 24-year-old white social worker, grew up in this overwhelmingly white city and attended the predominantly white University of Richmond in Virginia. Ask him why he supports Barack Obama and he says it's because of the candidate's race.

"Because he's black it makes me want to believe that he will change things," says Mr. Oliver, leaving an Obama campaign rally here. "It feels like you are part of something that's starting to change American politics. It's the cool factor. He's a rock star."


As he campaigns across the country, Sen. Obama, the son of a black father and a white mother, is both revealing and tapping into a changed racial landscape, especially among younger whites. After decades of often bitter polarization and racial tension on issues ranging from the spread of civil rights to affirmative action, many whites say they are drawn to Sen. Obama precisely because they think his mixed-race background reflects America's increasingly diverse population and projects a more optimistic vision of the country's racial future.

Sen. Obama's candidacy, whether it succeeds or not, appears to mark a turning point in race and politics in America: It is prompting significant numbers of white Americans to consider voting for him not despite his racial background, but because of it.

"Obama is running an emancipating campaign," says Bob Tuke, who is white and is the former chairman of the Tennessee Democratic party. "He is emancipating white voters to vote for a black candidate."

Sean Briscoe, a 24-year-old white who writes a political blog in Nashville, is one: "Obama doesn't come with the baggage of the civil-rights movement, focusing entirely on the race issue," he says. "He went from Hawaii to Indonesia. He has been in all these places where you get an appreciation for people who aren't like you."

Two decades ago, Jesse Jackson broke new ground by challenging whites to consider a black mounting a serious run for the presidency. Now Sen. Obama and a new generation of black candidates are running campaigns that make whites feel good about themselves. These younger black politicians, including Massachusetts Gov. Deval Patrick and Tennessee Senate candidate Harold Ford Jr., are, like Sen. Obama, seen by many whites as proof of the country's racial progress -- and their own.

Sen. Obama "doesn't steer away from race but makes sure that everything he does is influenced by his bi-racial identity," says Harvard Law School professor Charles Ogletree, who knew Mr. Obama as a law student and is advising the campaign.

"Obama has learned the lessons of [the failed candidacies] of Jackson and [Rev. Al] Sharpton, and married that with the smoothness of Colin Powell," says Scott Reed, a Republican strategist. "He has triangulated against all of them."

Sen. Obama continues to trail Sen. Hillary Clinton by substantial margins in national polls. Even with white support, he could become the equivalent of Eugene McCarthy in 1968 or Howard Dean in 2004, candidates who stirred fervor among white college students and intellectuals but were unable to win the nomination.

Sen. Obama and his campaign aides declined to be interviewed for this story. But his own writings and conversations with people who know him suggest his approach is both politically savvy and rooted in his own experiences.

He has always lived between two worlds. He is the son of a mother from Kansas and an African father, who separated when he was two years old. He lived in Indonesia for a time as a child, when his mother married an Indonesian, and then with his white grandparents in Hawaii. He excelled at elite institutions such as Columbia University and Harvard Law School, then worked in a black Chicago neighborhood. Friends say that double life has affected not just his personality but also his politics.

"Obama knows this is a majority white country," says Mary Pattillo, an African-American professor at Northwestern University who has known Sen. Obama for years. "He is acutely aware how his discussion of race and racial politics will be interpreted and received by whites. We who work in the white world are always mindful of not making whites feel threatened. You can't get angry as a black person working in white America. To get a message across, black professionals are always thinking about the perfect balance of assertiveness and non-threateningness."

Unlike Sen. Clinton, who regularly invokes the history-making achievement she could make by becoming the first woman president, Sen. Obama rarely mentions race directly in his campaign speeches.

Here in Portland, he emphasizes the "core decency of the American people" and his experience "bringing people together to get things done." He ends with a story about meeting an elderly woman in a small town in South Carolina who asked him if he was "fired up" and "ready to go" -- leading to a call and response chant that brings the crowd to its feet. Sen. Obama never mentions that the woman and the town are black.

"Barack is aimed at trying to get as much of the white vote as he can in order to win," says Ronald Walters, former campaign manager for Jesse Jackson's presidential campaign. The challenge facing black candidates like Sen. Obama who have national ambitions, says Mr. Walters, "isn't whether they're black enough. It's whether they're white enough."

Race remains a wild card in American politics. Candidates such as Mr. Ford, who narrowly lost the Senate race in Tennessee last year, have often come close to election only to find race flaring at the last minute to blunt their momentum.

"Obama knows that just because people are saying one thing doesn't mean they will vote that way," says Tim King, the African-American head of a charter school in Chicago who has known Sen. Obama for a decade. "No one ever really knows what people do once they close the curtain in the voting booth."

Sen. Obama's popularity among whites also stirs uneasiness among many blacks. In the latest Wall Street Journal/NBC News poll, Sen. Obama trails Sen. Clinton among black voters 46% to 37%.

"There is a lot of debate [among blacks] over how appealing Obama is to white folks," says Mr. King. "People are saying, 'Is he too likeable to white people?"'

"Obama doesn't really push people to consider what diversity really is," says Alfred DeFreece, a black teacher at Eastern Michigan University, who says many of his white students favor Obama. "He is close enough to what is a tolerated white norm, very much what is palatable and acceptable and good." Mr. DeFreece says he wonders whether Sen. Obama would be able to aggressively push social programs that help blacks in poverty and end discrimination.

At the same time, Mr. DeFreece also reflects the country's changing racial landscape. The woman he lives with is white.

Sen. Obama's rise reflects the ways American race relations have changed in the past 40 years -- the expansion of the black middle class, the rise of blacks to positions of prominence in business, academia and government, and a general lessening of racial tension.

About 75% of whites and 55% of blacks describe black-white relations as "somewhat good or very good," according to a recent Gallup poll. About 75% of whites and 85% of blacks say they support interracial marriage. In the latest Wall Street Journal/NBC News poll, 63% of registered voters said they believe voters are prepared to elect a qualified African-American as president, a dramatic increase from 1986 when just 29% said they thought America was ready to elect a black president. In the current poll, just 46% of voters say voters today are ready to elect a qualified Hispanic as president and 38% a qualified Mormon.

Sen. Obama runs stronger among younger voters who are at the forefront of many of these changing attitudes, from their embrace of hip-hop music to the diversity they encounter on college campuses. And he runs strongest among whites in their 30s and 40s who have lived through the racial changes of the past decades.

In the latest Wall Street Journal/NBC News poll, Sen. Obama trails Sen. Clinton among Democratic primary voters by 22 percentage points overall -- and by virtually the same amount among white voters alone. But his deficit is smaller -- 46% to 32% -- among voters aged 18 to 34 and he runs even with Sen. Clinton among voters aged 35-49. By contrast, he trails Sen. Clinton among voters over 50 by more than 30 points.

"I've met people who reminded me of Obama at high school," says Mae Mouk, a white 24-year-old assistant in a Washington, D.C., law firm who grew up in Baton Rouge, La. "I have dated outside my race. I had friends in high school and college who were in interracial relationships. I look at race differently than my grandparents and parents."


Most whites, of course, still live in largely segregated neighborhoods and have attended predominantly white schools. Even on more-diverse college campuses, blacks and whites tend to live in separate worlds. But many young whites pride themselves on being open-minded and on having been exposed to the rhetoric and reality of diversity.

"I don't see race as a big issue," says Mr. Briscoe, the Nashville blogger. "Most younger people can go in between the different communities and can get along with people of different backgrounds. It's a more multicultural way of life. I have friends of all different colors. I can listen to rap music."

Sen. Obama "is a citizen of the world," says David Bartholomew, a white law student at Boston College Law School. "Obama and my generation -- we see the future of the world as countries evolving together. Because of his background he can speak to a wider range of people than any other candidate. He can speak globally."

Younger voters like Mr. Briscoe and Mr. Bartholomew embrace Sen. Obama -- born in 1961 and too young to have marched with Martin Luther King Jr. -- as a post-Civil-Rights candidate. But his approach and campaign rhetoric consciously echo the hopeful spirit of the early civil rights days.

In his autobiography, written before he entered politics, Sen. Obama tells the story of his Kenyan father drinking with friends at a bar in Hawaii when a white man objects to being in a bar "next to a n-."

"The room fell quiet and people turned to my father, expecting a fight," Sen. Obama recounts. "Instead, my father stood up, walked over to the man, smiled and proceeded to lecture him about the folly of bigotry, the promise of the American dream, and the universal rights of man." The white man ends up buying Sen. Obama's father a round of drinks.

In the book, Sen. Obama looks back wistfully to the early 1960s, a "fleeting period" that promised "a bright new world where differences of race or culture would instruct and amuse and perhaps even ennoble."

By the late 1960s, both the rhetoric and substance of the Civil Rights Movement had sharpened with the rise of Black Power and groups like the Black Panthers, who accused whites of being racists, leading to an eventual white backlash and decades of black-white hostility and anger.

"The secret to Martin Luther King was that he flattered white Americans that you are better than you think you are," says Shelby Steele, a black research fellow at Stanford University's Hoover Institution. "The very essence of Obama's appeal is the idea that he represents racial idealism -- the idea that race is something that America can transcend. That's a very appealing idea. A lot of Americans would truly love to find a black candidate they could comfortably vote for for President of the United States."

Richard Harpootlian, a white lawyer and former state chairman of the South Carolina Democratic Party, was in college in 1968 when King was assassinated. He recalls going down to Atlanta to walk in King's funeral cortege. "They played the 'I Have a Dream' speech with his line about judging his children not by the color of their skin but by the content of their character," Mr. Harpootlian recalls. On that day, "I thought we were never further away from that vision. When I met Barack Obama, I felt as I'd never felt before that he typifies what Dr. King was talking about."

At the Obama rally here, 17-year-old Nick Wright, a high school senior, is one of the few African-Americans in the crowded downtown arena. He sits at a table with a white classmate, welcoming people to the rally.

"Obama isn't just reaching out to the African-American community," says Eli Noll, the white classmate. "He's so much for the youth of America."

Mr. Wright nods in approval. "I just read about Malcolm X in English class," he says. "He had a lot of good things to say, but nobody listened because of some of the other things he said. Obama -- he doesn't have to be like Malcolm X."

Write to Jonathan Kaufman at jonathan.kaufman@wsj.com

Fox Launches Business Channel Today

Rupert Murdock owns The Wall Street Journal, MySpace, and now has launched The Fox Business Channel today. It's only a matter of time before we see all three merged.

Wall Street Journal Agreement Expected This Evening

According to CNBC , the Bancrofts and News Corp are expected to reach an agreement for News Corp to own the Wall Street Journal.

Rupert Murdoch Closer To Buying Wall Street Journal - WSJ Online

You've got to admire Rupert Murdoch's flair for the deal. Just a day after the reported block by Chris Bancroft , he engineers a deal, or is at least close to it. It's up to the Bancroft's now.

Dow Jones, News Corp. Set Deal
Tentative $5 Billion Pact
Gets Board Vote Tonight;
Family to Meet Thursday

By SARAH ELLISON - Wall Street Journal
July 17, 2007; Page A3

News Corp. reached a tentative agreement for the purchase of Dow Jones & Co. at its original $5 billion offer price. The deal will be put to the full Dow Jones board this evening for its approval, said people familiar with the situation.


In what could be the final round of talks, yesterday negotiators from News Corp. and Dow Jones -- including Chief Executive Richard F. Zannino, company advisers and two independent directors -- reached an agreement in principle on a deal first proposed by News Corp. in mid-April. News Corp. Chairman Rupert Murdoch resisted pressure from Dow Jones to raise his initial $60-a-share offer, which represented a 67% premium to where the Dow Jones stock was trading before news of the offer became public. But Mr. Murdoch suggested the possibility of nominating former Journal Managing Editor Paul Steiger to the board of News Corp., according to a person who was there.

The deal still faces its biggest hurdle -- getting approval from the Bancroft family, which controls 64% of Dow Jones's voting power. Mr. Zannino has indicated to News Corp. that the family's position on the deal is too close to call, according to a person who spoke to him.

Michael B. Elefante, the Bancroft family's lead trustee, has scheduled a meeting for Thursday at which he would present the agreement to all Bancroft family members before asking for their final vote. Mr. Elefante is expected to give the family several days to make a decision, suggesting a final resolution could be achieved some time next week.

MORE


• Complete Coverage: A Deal for Dow Jones?
• Graphic: Key Players in the Dow Jones Bid
However, the Bancroft family remains sharply divided on a sale to News Corp. While some members are open to a deal, others have been looking hard for an alternative. Christopher Bancroft, 55 years old, a Dow Jones director who serves as a trustee overseeing shares that account for about 15% of the company's total shareholder votes, has spent the past several weeks approaching hedge funds, private-equity firms and others in an attempt to buy enough shares of Dow Jones to block a sale. Another family director, Leslie Hill, has pressed the company to meet with investors, such as supermarket mogul Ron Burkle, who have alternative proposals for Dow Jones. Ms. Hill's mother, Jane Cox MacElree, serves as a trustee for or owns shares that account for about 15% of the company's total shareholder vote.

News Corp.'s unwillingness to raise the price could also harden opposition from within the family. Some Dow Jones top executives and independent directors had hoped the Bancroft family's ambivalence about the Murdoch deal would help the company extract a few more dollars per share, according to people close to Dow Jones.

Dow Jones shares were down 54 cents to $56.95 in 4 p.m. New York Stock Exchange composite trading yesterday. The shares rose about 50 cents in after-hours trading.

The negotiations yesterday began with a lunch meeting attended by Messrs. Murdoch and Zannino.

In addition to The Wall Street Journal and its international and online editions, Dow Jones publishes Barron's, SmartMoney magazines and other periodicals; DowJones Newswires; Dow Jones Indexes; and the Ottaway group of community newspapers.

Dow Jones: No Murdock / WSJ Deal

The Dow Jones has just annouced that there's no deal for Rupert Murdock's News Corporation to buy Dow Jones and the Wall Street Journal. Stay tuned.

Here's the details from Reuters:

By Robert MacMillan

NEW YORK (Reuters) - Rupert Murdoch's News Corp. has not yet reached a deal to buy Dow Jones & Co. Inc. and discussions continue, representatives for Dow Jones and its controlling Bancroft family said on Friday.

Talks are continuing over such issues as price, two sources familiar with the matter also said on Friday.

Dow Jones shares gained 1.6 percent to $58.79 on the New York Stock Exchange.

The comments on Friday countered a report in London's The Business weekly magazine that said the two sides have completed talks and were expected to announce a deal next week, citing unnamed sources acting for the Dow Jones board.

The report also said Dow Jones had accepted Murdoch's original offer of $60 per share for the company. Investors and analysts have speculated Murdoch might have to raise his bid by a few dollars per share to clinch a deal.

A Dow Jones spokesman said the report was incorrect. A News Corp. spokesman was not immediately available.

Murdoch made an unsolicited $5 billion offer to buy the publisher of The Wall Street Journal newspaper. The offer valued Dow Jones at a 65 percent premium to its stock price before the bid was disclosed publicly in May.

"There is no change in the status of the discussions currently under way," a spokesman for the Bancrofts said. "News Corp. is continuing to conduct due diligence and the negotiations are not complete."

Some three dozen Bancroft family members control Dow Jones through a combined ownership of 64 percent of voting shares.

Murdoch and the Dow Jones board last week reached a tentative agreement on creating an independent board to oversee the editorial integrity of the Journal and other Dow Jones operations, an element key to securing the Bancrofts' approval.

The board's members would have the power to approve or veto editor candidates selected by News Corp., sources familiar with the matter told Reuters at the time.

It would comprise members chosen jointly by News Corp., Dow Jones and the Bancroft family.

Separately, Murdoch told Reuters in Warsaw last week that an agreement with the Bancrofts would come within two or three weeks, "or not at all," adding that he had no plans to boost his bid price.

A deal for Dow Jones and the Journal, viewed as one of the world's most reputable newspapers, would help anchor News Corp.'s soon to be launched Fox Business Channel, a cable news network rival to General Electric's CNBC.

News Corp., founded from a pair of newspapers in Australia, now owns close to 120 newspapers including the Times and The Sun in Britain, the Australian in Australia and the New York Post in the United States.

News Corp. shares fell 9 cents to $21.55.

(Additional reporting by Michele Gershberg and Kenneth Li)

Rupert Murdock's New Corp Buys Dow Jones, Owns Wall Street Journal

Rupert Murdock shown with his wife, Wendy Deng

In a move that's rocked the media world, Rupert Murdoch, chairman and chief executive of News Corp, which in turn is the holder of organizations like Fox, My Space, Direct TV, and of course a dizzying number of tabloids, has just purchased the Dow Jones Corporation, which in turn has the famous newspaper The Wall Street Journal.

Murdock has made no secret of his desire to have the Wall Street Journal in his basket of media companies. To better understand what Mudock intends to do, two Wall Street Journal reporters sat down to talk with the media mogul about the then-in-progress deal to by Dow Jones and by relation, the WSJ. But before I get to that, here's my take on what Murdock's purchase of the WSJ means.

Quite simply, I don't think he's going to try to mess with the journalistic integrity of the paper. But I do think the WSJ's Internet presence will improve dramatically, with (perhaps) blogs and social networks and perhaps video. It's at the very least a logical move. PBS Commentator Bill Moyers has a take as well, one more onminous than my own. Here it is on video:



Now, here's the WSJ interview, which I took from WSJ.com.

WSJ: We have a lot of things to ask you about in your whole career -- it would be a good opportunity for you to talk about your role as a newspaper proprietor and your philosophy and how that has evolved over time.

Mr. Murdoch: I've been a newspaper person since I was a baby, practically. I found it riveting. I just love newspapers, and that's not any exaggeration. And the frustration of my life has been as the company has grown bigger, and we've taken opportunities, I've had less time to pay any detailed attention to them.

We've just had two miserable weeks or three… doing budgets for every single division of the company.

But my father wrote in his will that… he had gone to the trouble to buy [the paper in Adelaide, Australia, the Adelaide News]… so that I would have the opportunity to do good. The quote is available. I've tried to bring up my children with that sense, too. And none of them, certainly the three middle ones, have never thought of a career other than somewhere in media, just because they saw the sort of the life I've led and the excitement of it. And they're all very hard workers, so I'm pleased about that.

How do I see newspapers? You have the opportunity to make a difference. But any difference we make today is providing more choice. We've kept papers alive for years or part of them… took the losses for 15 years or more to develop franchises to give people alternatives.

We've done it with the Australian, the Times in London -- and no one can say that they're not today very, very fine newspapers.

WSJ: Some have described that in the '60s, you were in the newsroom of the Australian and talking to reporters about a story and saying, "That was a great story today and why don't you look at this angle?" I talked to somebody who said to me you're like an enthusiastic news editor who sometimes would get an idea in his head, and it's sometimes hard to persuade him the story wasn't there.

Mr. Murdoch: [Laughter] That's probably true. A long time ago. That was 40 years ago when we started the Australian. And I managed to spend for a few months, about half my time there. Even there I spent half the time on the phone talking to people at other parts of the company. We made plenty of mistakes trying to find our way at the Australian. Plenty of mistakes.

WSJ: At the New York Post you were editor in chief. Wasn't that your title when you first bought it in '76 or so?

Mr. Murdoch: I was going to say it is now, but it's not. It has been at some stage.

WSJ: Is it a sign of how much more involved you were?

Mr. Murdoch: Look, when a paper starts to go bad and go down the drain, the buck stops with me. Shareholders don't ring the editor, they ring me. And that once or twice has led to very unhappy but necessary decisions. I made mistakes but had to change them. It's been very seldom.

WSJ: Can you specify which ones you mean? Do you mean Harold Evans, who you made editor of the Times of London when you purchased the paper in 1981?

Mr. Murdoch: Yes, specifically Harold. He'd made a great name for himself at the Sunday Times…. I was a big admirer of what he had done there, to put that sort of energy in the Times. And he has great expertise in many things -- a great editor of a story. I was warned by two of the national directors to have him not to do it. And it's too long a story, but it ended up A) costs out of control B) the paper changing its policy day by day -- atomic submarines and whatever they were talking about... and the issues were then we had which cabinet ministers had been at lunch which day. Harry is not a strong… I don't want to say libelous things. It ended up with a journalist coming to me and saying, "Look, this can't go on" and that "more than half of us are going to take a walk," and so we had to part company. And he decided to write a book with I would say a tremendous number of inventions. It's OK. People feel the need to justify themselves. Harry was and is remains a very gifted person in many ways … I don't want to defame Harry at all.

WSJ: I want to ask about the independent board in London. You said in your letter to the Bancrofts that you would set up a structure that was "exactly along the same lines" as you did at the Times and Sunday Times. You have now mentioned a couple of times Harry Evans and the independent national directorate. I want to ask you that because one of those rules that you set up was that you would not get involved in staffing decisions. That the board would have veto power over the hiring and firing of the top editor.

Mr. Murdoch: That's right.

WSJ: We talked to a guy named Fred Emery. Emery says that you called him into your office back in March of '82, said that you were considering firing Harold Evans. He said he was shocked and reminded you of this promise that was embedded in the bylaws of the paper, that the independent boards had to approve this. He says you told him that "God, you don't take all of that seriously, do you?" And he said "of course we do" and that you laughed and said, "Why wouldn't I give instructions to the Times, when I give instructions to editors all around the world." What is your response to that?

Mr. Murdoch: I don't remember. I do remember actually a conversation with Fred and it did not go that way at all, according to my memory. That he was extremely critical of Harry, and in fact, I did go to the national directors before I spoke to Harry.

WSJ: I want to ask you about the structure that existed there.

Mr. Murdoch: That still exists. I understand you've checked up with the directors themselves and checked up with the editors.

WSJ: Those who would speak to us. A number of people that we interviewed who were editors at the Times not just in the Harry Evans era, but even after, up to 10 years, describe the board as ineffective. They can't really think of anything it's ever done.

Mr. Murdoch: I guess they never had any complaints to take to the board.

WSJ: We know of at least one complaint that the board handled that I spoke with a director about.

Mr. Murdoch: Really? What was that?

WSJ: Jonathan Mirsky who was working in Hong Kong.

Mr. Murdoch: I wasn't at any board meeting about that. But I know who Mirsky is.

WSJ: He complained publicly that his stories were being spiked. He told us he didn't even know there was a board. I spoke with one of the board members who said because they learned about that, they decided to investigate. He said they called up the then editor of the Times, asked him if he received outside pressure to spike these stories. He said, "No, I did it on my own." And they said, "OK, that's it. That's the extent of our mandate. We're only responsible for protecting the editor."

Mr. Murdoch: The editors decide if stories aren't that good -- they decide that about a lot of stories they spike.

WSJ: Doesn't that suggest the board's power is quite limited?

Mr. Murdoch: Not at all.

WSJ: Since you pick the editor.

Mr. Murdoch: They have to approve. And they interview the editor before he's appointed.

WSJ: They didn't even interview Mirsky.

Mr. Murdoch: You talk to Robert Thomson [Editor of the Times of London] about Mirsky. He's got very strong opinions on the subject. You see what he has written about China in the last two or three months.

WSJ: Do you feel the board has been effective over the past 26 years?

Mr. Murdoch: They do what they're meant to do. They meet four times a year, maybe six times.

WSJ: Four times.

Mr. Murdoch: Four times. OK. You know more about it than I do…. It's quite a large board, but within it, there are six what we call national directors. They are people I haven't met before they've been on.… But basically people I don't know ... They have the right to say, 'No, we don't want that person appointed to the national directorate with us.' They pretty much pick themselves. That's my understanding. Maybe we submit names and they pick one of them or something. And they meet with the editors, the two editors, I believe, separately. There is a bigger board of which they are part of, and they get reports about circulation and trading balances and so on. That goes on for about an hour. Also on the board are two journalist directors that the editors choose, who report back to them what's been said.

WSJ: Are you on the board as well?

Mr. Murdoch: Yeah, but I don't often get there. I'm here.

WSJ: So there are two journalist directors picked by the editors?

Mr. Murdoch: Yes. And then there's a bunch who are senior executives in the company.

WSJ: Are you going to finish the thought in terms of their effectiveness?

Mr. Murdoch: Well, they're pretty limited in what they can do because it's a subsidiary board. We don't go to them to say we want to spend $200 million in putting in a new color plant in order to satisfy the color demands of Sunday Times. We'll tell them about it.… They don't get into business judgments.

WSJ: What is their role?

Mr. Murdoch: They're there to protect editors if the editors feel they need protection. From me or from anyone of the management.

WSJ: Lord Biffen approved…

Mr. Murdoch: He wasn't on the board.

WSJ: He was the British government official who approved the deal -- he was the one who decided not to refer your purchase of the London papers to the monopolies commission -- in exchange for this resolution…

Mr. Murdoch: No. Well, yes and no. All these things had been in existence, they were put in by Thomson [the Thomson Corp., the previous owner of the Times and Sunday Times of London]. What he did was he made actually part of the law of the land. He put it through Parliament.

WSJ: We talked to him and he described it as a political "fig leaf." And said the only reason that this was done was to shield the government from criticism that it was giving you too much power by giving you the two most prestigious papers in the country, given that you already owned two other papers. They didn't consider these very promises important. He said he was ordered to do it by a civil servant. It was really a political cover and that's why they did it.

Mr. Murdoch: I can't comment on that. I don't know.

WSJ: How would the Journal board work? Would it be exactly the same?

Mr. Murdoch: That's what I'm suggesting. I'm told they'd come in with suggestions to me, so I don't know.

WSJ: Who would appoint the members?

Mr. Murdoch: I would have thought that it would be part of negotiations almost, who the first board would be, right? And then it would just roll on from there.

WSJ: What are you looking for?

Mr. Murdoch: People with absolutely no business connections to me nor the family. The family's selling out. They can't sell it and keep it. I have all the respect in the world for them, but you can't have it both ways. I can't put down $5 billion of my shareholders' money and not be able to run the business. That doesn't mean changing the editorial. We have no plans to change anything in the editorial.

WSJ: Do you mean the news side?

Mr. Murdoch: Both. I think the two-headed arrangement works fairly well. There are obviously -- sometimes when they're on different sides, but that's all right. It's part of the character of the paper.

WSJ: You wouldn't change the editor?

Mr. Murdoch: No. Or the news editor. I don't know [Managing Editor] Marcus [Brauchli], but I know he's a friend of Robert Thomson [editor of the Times of London]. And I've heard very high recommendations.

WSJ: What would you do with the paper? The New York Times quoted you as saying the stories on the front page are too long.

Mr. Murdoch: I didn't. Let me say this. I said I was frustrated by the fact that so much of the good stuff I just didn't get time to read, I found myself keeping, putting sections of the paper aside to read when I got home at night, and not getting around to it. That's my incapacity as a slow reader, perhaps.

WSJ: But you are spending $5 billion to buy the paper.

Mr. Murdoch: I think it's a big opportunity in the digital area…. We've never seen such an expansion globally around the world.

WSJ: Norman Pearlstine said you had said that if you succeeded, you would give up your job here for a year and spend the time at the Journal. It was in the Los Angeles Times.

Mr. Murdoch: I have said in the past, you know what I'd love to do is retire and be the full-time chairman of the Journal for a few years… but I've got too many responsibilities here and everywhere else.

WSJ: Tell us what you would do… Are there changes you would like to see at the Journal, improve it?

Mr. Murdoch: Not at all.

WSJ: Some people would say the front page might be boring.

Mr. Murdoch: The front page is not boring. Absolutely not.

WSJ: Then what's the opportunity for you? Digital?

Mr. Murdoch: I think it's in the digital area, digital and TV. And I think we've got to pour some money into digital. We've got to do a lot of things there… There's so much going on on the Internet. We've got to find new ways and new business models to get revenues. Or else the world is going to be owned by Google. I was asked at this investment thing I had to go to, what competitors I see I would have in five years time. Globally. I said I'm sure they'll be a lot of them. I know one is Google. It's just getting so strong, so powerful. And I know the guys, and like them. They're friends of mine. But it is a big fact of life. They sort of just hit the mother lode of search advertising and they're just destroying Microsoft search, hurting Yahoo's and making others irrelevant. I don't understand the technologies but whatever their technology is, it seems to be producing a much higher margin of profit. What are they going to do next? I saw in the New York Times today they're devising certain, a lot of computer applications which would directly challenge Microsoft, which they'll give away. So it's going to be very interesting. Four or five years ago we were all convinced Microsoft was going to take over the world. Now we're all convinced it's Google. But that's another subject.

The Internet is a great leveler. All newspapers count for less these days. So … as far as I'm concerned, I want to drive News Corp., as I've said, into being the greatest content company, whether it's in news, opinions, writing or whether it be film or television. I mean there are so many new pipes in how you deliver these things. And so on. We'll just have to use them all and see what's economical. I had a study done, and I think you've had many more studies done down there. What if they made The Wall Street Journal free instead of charging 80 bucks?

WSJ: You mean WSJ.com?

Mr. Murdoch: You'd have 10 times as many visitors and lets say five times as much advertising. But you'd lose the other, it works out at about a push…. So, the problem with a regular newspaper is how do they replace or hold their revenue models. It's not all been about the Internet. Change of lifestyle, people's time. Circulation really has been going down for 20 years before the Internet. And on top of this, in this country you have the impact of the discounters. The Targets and the Wal-Marts and what they've done to the department stores… So what's happened at papers like the LA Times. Used to see pages and pages of five different department stores. Now you get a couple of pages from one … We'll see how Mr. [Sam] Zell handles that.

WSJ: So no changing of editors then and you would leave existing management in place. Would you call them up and talk about the news of the day?

Mr. Murdoch: I'd love to wander around. I'm not going to have much time to do it. I find people quite like it if I show an interest in their work.

WSJ: How do you view the business side and the news side, and whether there's a separation or a wall between them so that when The Wall Street Journal covers News Corp., would that change?

Mr. Murdoch: There's an absolute wall. I just ask you to spell my name right Have a look at the reviews of Fox films in the Post. You can be sure that every one gets slammed ... Do they try to help our business interest or not? The answer is no.

WSJ: There seems to be other examples. The Daily Telegraph in Sydney a few weeks ago devoted most of its front page to your announcement that News Corp. would reduce its carbon emissions. The company logo was in the headline and there was an editorial that suggested you were a visionary.

Mr. Murdoch: [Laughter] I don't know anything about that. And we sure didn't do that in the Post, which I'm closest to, hardly got them to notice it. Actually, it's interesting. It caused huge excitement among our staff in Australia and in Hollywood. And a fair bit in London. New York was pretty cynical.

WSJ: Isn't this shilling for News Corp?

Mr. Murdoch: That is, absolutely. Shouldn't be. That's bad.

WSJ: The editor told us he was proud of it.

Mr. Murdoch: They're all crazy greenies over there … Don't say crazy. Extreme greenies. They're also coming out of a 10-year horrible drought.

WSJ: There was the famous 1996 New York Post headline: "Ted Turner: Is He Nuts?"

Mr. Murdoch: Page one? Well, we were in a war …. We're making up at the moment, heavily.

WSJ: Are these editors doing this to get on your good side?

Mr. Murdoch: I don't know who pulled which string, which made Gerald Levin go back on his word, on his promise that he was going to carry Fox News -- and when he walked out on us … We went to war with Time Warner. Why shouldn't Fox News be on? Why shouldn't any news be on? I even put Al Gore's news on DirecTV for which I suddenly became his world's best friend, I think. Because he bought this little thing and that was the only contract they had. He's made it and now he's got it going on Comcast. He's got it everywhere. I believe in a variety of opinions, we're not trying to push one side.

WSJ: You said you went to war with Time Warner. But is using your papers to campaign on your behalf appropriate?

Mr. Murdoch: Probably not. I think it's OK. You're talking about the daily New York Post in same breath as The Wall Street Journal. They're not the same.

WSJ: Do you agree that you were using them?

Mr. Murdoch: You seem to be reminding me of things. I didn't certainly write that headline or doing anything. I am guilty of making jokes that it was time for Ted to go back on his lithium … That's when he called me Hitler or something.

WSJ: You also went after New York Daily News owner Mortimer Zuckerman with the Post. He had that Coliseum dispute with the city. The coverage was a bit excessive and very negative. One headline called him "Suck-up Zuck." It did seem like a campaign against him.

Mr. Murdoch: It certainly wasn't me… there may have been a very worthwhile campaign, that he was taking the city for a ride. I don't know. I've completely forgotten the details. It was a genuine public issue.

WSJ: Another one was U.S. Sen. Ted Kennedy in Boston, when he tried to stick in that amendment to get you to unload the Boston Herald.

Mr. Murdoch: He didn't try, he did.

WSJ: They ran headlines calling Ted Kennedy "Fat Boy." I talked to Ken Chandler who said that this was basically your cause -- that he was the general in this campaign. He said you both share the same world view. He conceded it got personal. A Herald columnist still calls him "Fat Boy" to this day.

Mr. Murdoch: Don't blame me for that what they're doing today. Look, a knock-around tabloid calls a lot of people things. We don't harbor any hatred of Teddy Kennedy or any Democrats.

WSJ: One thing to address, you obviously have a great love of newspapers, but you're also a business man…

Mr. Murdoch: Had to be. I mean, if they're not viable, the papers die.

WSJ: Do you think there is a dividing line -- or ought to be -- between the business side of a news operation and editorial side?

Mr. Murdoch: You've got to try and keep politicians at arm's length as much as you possibly can. When I go to London I'm courted by the leader of the Conservatives and I'm courted by Blair and so on… It really gives you an insight into people. But you mustn't be drawn into a feeling of closeness on a personal basis because they have too much influence on you and your judgment. And that goes for an editor, as much or more for a publisher.

WSJ: Seems to me as a proprietor, you have every right to tell them who to endorse.

Mr. Murdoch: No. I don't think so. I don't do that in London, and I wouldn't do it with the Journal.

WSJ: You did it at the Post early on.

Mr. Murdoch: That's different. I wouldn't at the Journal and I do not do it at the Times. The Times [and Sunday Times], in the election two weeks ago in Scotland came out for opposing parties. The Sunday Times had gone crazy. I didn't know they were going to do it. I wouldn't have spoken to them.

WSJ: We get the sense there's not as strong a dividing line in this area as there is in other companies. Editors feel like they are part of the corporate group. One example in Australia, some of your papers guarantee space to the Australian Football League in exchange for certain advertising rights. Generally it helps them with their relationship with the AFL, and it was mentioned when Foxtel and News as a group bid for TV football rights and won in 2001. The idea of guaranteeing anybody editorial space in exchange for some sort of business relationship is something unusual.

Mr. Murdoch: I have no knowledge of that at all. We certainly would never do that. I didn't do it. If you're saying it happened, I'll take your word for it.

WSJ: We want to talk about how you've changed your role -- in 1972 you helped design ads for the Labor Party in Australia that during the campaign ran in the Daily Telegraph.

Mr. Murdoch: I never got too close to [former Australian Prime Minster Gough] Whitlam, and they would have made a terrific difference, we really poured it on. One of my lessons in life not to get too close to politicians.

WSJ: You don't recall writing the ads?

Mr. Murdoch: I'm not denying it, I just have no memory of that. I might have written an editorial, but I don't think an ad.

WSJ: Why was that a lesson in your life?

Mr. Murdoch: Oh, I think we went a bit overboard [in supporting him].

WSJ: What about in '75 during the very contentious election.

Mr. Murdoch: I think we did a good job of covering it … The whole thing was falling apart… The government and everything was just getting terribly out of control. Gough was always going on extended trips to Crete to look at ruins.

WSJ: The 1975 campaign got a lot of attention. There was a strike.

Mr. Murdoch: …There was a lot of emotion from all sides.

WSJ: Some people have made allegations that you directed people to write certain anti-Whitlam things.…

Mr. Murdoch: No, but there was a very strong editor at the paper, Bruce Rothwell, who was anti-Whitlam. He certainly spiked a lot of people's copy… Reporters, everyone got so emotional they had reporters writing "Whitlam bestriding the nation like a giant" and so on. And he was down to about 30% in the polls and Bruce tried to bring balance into it…

WSJ: Paul Kelly told me he was replaced as political correspondent during the campaign because he had gone public opposing the company's point of view. You had rehired him in '85 to be the chief political correspondent at the Australian and that he went on to edit the paper.

Mr. Murdoch: I didn't personally replace him. I was living here. I remember he did leave and then I remember him coming back.

WSJ: The fact he had to be replaced...

Mr. Murdoch: I don't bear grudges. Not at all.

WSJ: Do you think Rothwell went too far?

Mr. Murdoch: I think he may have been too inflexible. He really was trying to bring balance. High emotion on all sides.

WSJ: The Australian wrote that the campaign set back the readership by 15 years.

Mr. Murdoch: Not true … What set back the readership was that I wrote a story that was a terrific scoop….

WSJ: The Iraqi loans affair?

Mr. Murdoch: Yeah. Absolutely true word for word… My source disappeared when it came to court. But my secondary source lied and later became prime minister, I won't name any names. [Laughter]

WSJ: How many times did you write stories yourself?

Mr. Murdoch: Very seldom. But that caused such an uproar that there was actually an organized boycott and all the schoolteachers, Labor Party members canceled the paper. We lost 10-12,000 circulation and that did take a long time to get back.

WSJ: The controversy was over the story, not that you wrote it?

Mr. Murdoch: It was daring to suggest that Gough had any blemishes.

WSJ: This is before the elections?

Mr. Murdoch: It was way after the election. Because there was a crisis, he'd been promised, he was given cash, which they'd spent, and was promised that they'd get another quarter of a million and they spent that too. Then the ad agency was going to go broke because they couldn't settle with the newspapers which they were under a legal contract to do. That caused a panic, and the guy who organized the meeting, decided to tell me about it. I hardly knew him. I didn't know how to check it out… and I found a secondary source on the story. He was visiting Israel, and he said it's exactly true. I've got to fly home now and get a loan from the bank.

WSJ: Did you put your name on the story? Was it "By Rupert Murdoch?"

Mr. Murdoch: The byline was special correspondent but everybody knew.

WSJ: But that wasn't the only time you wrote a story, or was it?

Mr. Murdoch: Yeah, [the only time] that I can remember.

WSJ: I want to ask about this Birmingham Gazette incident in England. Apparently, you wrote a letter after your internship to the paper's owner.

Mr. Murdoch: All at the age of 19, yeah.

WSJ: Denouncing the Gazette's editor, Charles Fenby, as incompetent, urging that he be fired. His son told us this. He said Fenby kept his job and laughed off the episode. Do you remember writing it?

Mr. Murdoch: Absolutely… I wrote sort of an around-town gossip column type thing… it was very respectable… and the last of my three months there or six months there … but no one ever saw Fenby or anything. I should never have wrote that letter. It was 57 years ago, give me a break. [Laughing] It was correct mind you, what I wrote. I won't take it back.

WSJ: We want to ask you about an episode about Frank Giles, the former Sunday Times editor. This has been recounted many times in books. Even before the deal was closed on buying the Times and Sunday Times, there's this episode where you go in the composing room and you see the editorial being written up and it fails to mention one of the papers that Express newspapers owned. And you pencil it in, and they take great offense. Evans wrote that he scolded you and you apologized profusely.

Mr. Murdoch: It was so ridiculous. We're in a hot metal room… I could see this factual error and I gave it to Harry and said, "Look, there's a mistake in here." This thing that I was seen putting a pencil on a proof. Come on, I was trying to improve it.

WSJ: He also says that despite one of the promises that you would not have anything to do with staffing decisions, that you ordered him to sack the magazine editor.

Mr. Murdoch: No. Frank's gone nuts. He really is losing it. I saw him over the summer. He was very nice. Never. I don't even think we had a magazine at News of the World at the time, that long ago. But certainly, I never did that. A color magazine was sort of the big winning thing that Thomson [Corp., the previous owner of the paper] did. He thought they have them in America, let's have one here. It crippled us financially a little bit … It jumped the circulation of the Sunday Times a couple of hundred thousand. I never did that. Never, never, never.

WSJ: Frank Devine says Ken Cowley, when he ran News Ltd. in Australia, tried to pressure them to not run stories that would hurt News Corp.'s other businesses and Ansett, the airline, is the example that several people bring up. Devine said he thinks he was fired because he wouldn't agree to what Cowley wanted of the coverage of the pilots' strike in '89.

Mr. Murdoch: I don't know about that. At all. I know why Frank Devine was moved, but that's another matter. Frank was a mistake of mine. I love Frank.… I got to know Frank here, Frank had been one of six editors at the Readers Digest… And to put him right into a daily paper. You've got to adjust to the pace…

WSJ: Then why did you also make him editor of the New York Post and the Australian?

Mr. Murdoch: I don't know. I really forget that time. Whether Frank asked to go back to Australia or I thought it was a good move that he was a more cerebral sort of person … I've honestly forgotten.

WSJ: Do you think maybe there was too much of a culture where some of these executives thought they could pressure editors about things that related to other parts of the company?

Mr. Murdoch: No, certainly it wasn't set by me. No and I'm not sure that's true about Cowley. I'm not sure at all. I wouldn't defend the practice.

WSJ: Andrew Neil of the Sunday Times told us when he was the editor, they had a story about British officials preparing to bribe to win a construction contract in Malaysia and this offended the Malaysian prime minister. At the time he said you were trying to sell satellite dishes for Star TV in Malaysia. He says you called him up and told him the coverage was boring.

Mr. Murdoch: I never tried to sell any satellite dishes in Malaysia. I remember the story which they tried to run and run and run. I said, "Are you sure of your facts? Have you gotten a smoking gun here?" I might have asked him that. But I never tried to stop it or anything else. I was surprised at Andrew…. He certainly came out against Thatcher and tried to kill her without a word to me.

WSJ: Do you think that was that a mistake on his part? Should he have asked you first?

Mr. Murdoch: No.

WSJ: Why were you questioning those stories? Why would you care about those stories?

Mr. Murdoch: I want everything to be accurate. I want to produce good newspapers.

WSJ: So there was no business interest for Star in Malaysia?

Mr. Murdoch: No.

WSJ: He says he left his job over this.

Mr. Murdoch: Bull----. Who? Andrew? Bull----. Andrew left years after that … And then he wanted to come to America and do TV here… We made pilots of shows … and showed it to focus … I said to Andrew, "Listen, I'll support you as to the quality of your stories … but you can't be the star and the director. You can be behind the camera or you can be in front of the camera, but you can't have both. And he said, "If that's the case I'll have to go back to England or my public will forget me."

WSJ: Your criticism was over accuracy? Did the Malaysian prime minister complain to you?

Mr. Murdoch: No.

WSJ: We want to ask you about the South China Morning Post. We talked to Seth Faison. When the paper first started the Beijing bureau, he and another reporter say you never interfered, but they say Clarence Chang, who was on the business side of the paper -- in 1988 he was the managing director -- did. They say he was going to Beijing for a business meeting and while there he met with the reporters and complained to them about a column they wrote that was critical of a spring festival covered on Chinese television. And Faison says Chang told them they should write more upbeat stories about China. He said to them, it's "good for me, for you and it's good for Rupert." The reporters said they ignored the appeal.

Mr. Murdoch: Good.

WSJ: You don't approve of telling reporters to write positive stories?

Mr. Murdoch: No.

WSJ: Why did you sell the paper?

Mr. Murdoch: Because I saw what was coming… There would be pressure from Beijing every day. And I think it's just about driven the poor guy who bought it mad although he's got big interests in China… they've now got someone from Xinhua sitting outside their office…. It was a very profitable paper.

WSJ: Was that a problem in terms of expanding in China?

Mr. Murdoch: That was never part of the plan … The decision to sell it was to get out ahead before any pressures came from anywhere. We never had any policy pressures on us there at all.

WSJ: So you saw it coming. But was your ultimate concern down the road that to do battle with Beijing might be bad for your expansion plans in China and you wanted to avoid that?

Mr. Murdoch: No. We don't really have any expansion plans. We have a little channel in China … in Shanghai which is officially allowed onto two or three cable systems. I think we've managed to get the losses down..

WSJ: Things haven't gone great for anybody?

Mr. Murdoch: For anybody. Ask Google.

WSJ: Tell us about why you dropped the BBC in China on Star TV.

Mr. Murdoch: Totally separate issue, two different things. The BBC was very simple. We bought in a battle with Pearson, actually, because we were partners in Sky and not getting on at all. They turned up trying to buy Star and I went in fairly blindly … and it was losing $100 million a year, and they were putting out these channels over Asia all in English … So was MTV, and so was Prime Sports. And so on. I mean how are you going to get an audience in English? It's ridiculous. I said how are we going to pay BBC ten million dollars if they get billions of dollars in taxpayers' money? They're trying to kill us in England. Let them pay their own way. The service goes on uninterrupted as far as I know. But at their cost …

WSJ: We spoke with Gary Davey who was then head of Star TV in Hong Kong. He said one issue was that the BBC station identifier showed the Tiananmen Square episode and it was a constant reminder. He said you were emphatic about dropping the BBC.

Mr. Murdoch: Primarily a financial consideration. But it might have occurred to me, this might have not hurt relations with Beijing. At that stage, I had not been received by a single minister or anyone. They had a report from Xinhua that when I had the South China Morning Post that I was a member of MI6 or MI5 [British intelligence agencies]. So no one was allowed to see me. We just had a total blackout for five years.

WSJ: And the book by Chris Patten, the former Hong Kong governor?

Mr. Murdoch: Look, we reject books all the time, publish too many, not politically, don't get me wrong. Everyone's publishing too many books to get any space in Barnes & Noble or anywhere. The Chris Patten book, when I was asked about it, I said … "I just think that he was a terrible governor down there… And he was going back on everything that Thatcher had said … he was trying to change the status quo ... But the editor fell in love with it and the manager never had the guts …. It was just finding another publisher. We weren't suppressing it, in any sense. On the other hand, in retrospect, it would have made a whole lot less fuss if we just let it go on. A mistake.

WSJ: Your personal representative in Beijing said you thought the book would set you back and to "kill the f------ book." Did you think it would set you back?

Mr. Murdoch: No. No one in China ever spoke to me about it. I was never put under any pressure.

WSJ: We'd like to come back to an important point. What's the difference between the Post and the Journal?

Mr. Murdoch: I feel more restraint at the [London] Times than I would at the [New York] Post and so on. Let me give you another parallel: London. I walk around the Sun office a lot more than I walk around the Times office. And talk to the editor a lot more, I don't say do this and do that. But she'll come into me and say Gordon Brown called me today about such and such and what do you think? And I'm probably therefore a little bit more involved.

WSJ: Why is that?

Mr. Murdoch: Because they don't have any restraints on me. That's all I'm saying. That would make this more of a parallel, you know. And I'm quite unashamed, I enjoy popular journalism. I must say I enjoy it more than what you would call quality journalism. I used to bait my friends in London by calling it the unpopular papers. That's before we got the Times.

WSJ: You personally like The Journal, don't you?

Mr. Murdoch: It's absolutely my first paper, the Post is my second…. What worries me is people not reading newspapers, they have like My Yahoo… I couldn't live with that -- at least scanning three or four newspapers in a day. And my head's full of useless info, but some of it turns out useful occasionally.

WSJ: The Guardian's Sunday newspaper, the Observer, in London reported that you would appoint Robert Thomson as publisher of The Wall Street Journal. Is that true?

Mr. Murdoch: No. I haven't thought about it. New idea to me. All I've heard about [Wall Street Journal Publisher] Gordon Crovitz is that he's this brilliant man.

WSJ: So does that mean you wouldn't appoint Thomson as publisher?

Mr. Murdoch: I've never thought about it. And I would imagine that Gordon Crovitz would stay there, I don't know. I understand that they've all been given golden parachutes or something. Or change-of-control bonuses of several millions. But I don't know what it adds up to.

WSJ: DJ stock is trading at around $61. That's above your $60 offer. Are you prepared to offer more?

Mr. Murdoch: No, no. Everyone thinks that $60 is a terrific offer. Most people think I'm stone crazy….

WSJ: So you're not willing to raise it, under any circumstances?

Mr. Murdoch: No. Right. Look let's go into a negotiation and let's see. I'm not willing to negotiate it. I'm not willing to discuss it any further. I don't have any secret plans to pay more.

WSJ: But you could easily afford to pay more, no?

Mr. Murdoch: I'm not holding a charity, I could afford to give more money to charity. But are the Bancrofts the best charity in the world, I don't know.

WSJ: We heard that you've been having ongoing contact with different members of the family since some time last year.

Mr. Murdoch: I haven't personally.

WSJ: Through representatives?

Mr. Murdoch: Various people, yeah.

WSJ: You told people last year you couldn't do a deal right then because of Liberty Media Corp. But you were trying to gauge the interest.

Mr. Murdoch: If I'd said that at the time that would have been true. I just don't remember…. I've never spoken directly but someone might have been. You won't get a denial from me.

WSJ: On behalf of our colleagues, you say that retaining the team of journalists, editors, management would be a key priority for News Corp. What would you do to retain the team?

Mr. Murdoch: Huge raises for everybody. [Laughter] I'd have to see when I get in there. But I would have thought that the editors who are there in the different areas from what I've heard have the support of their staffs and I will try and build that up. You've got to have really strong leadership and excitement and things going. That's also got to go on the business side because they've got to get some more advertising. I mean the profit of The Journal is very small if you look at the reports. Those silly little Ottaway papers make more than the Journal does.

WSJ: So you would focus on generating more ad revenue?

Mr. Murdoch: Yeah, or and electronic everything, circulation, anything. The Journal has had no money spent on marketing that I'm aware of for years. I imagine whatever we do would take the profit down in the short term… I mean of the Journal… It's got to have money put back into it, particularly on the digital side.

WSJ: If you want to raise circulation immediately some people would assume you would try to liven up the Journal.

Mr. Murdoch: No, no, no. I want to do some due diligence. I don't even know exactly how many printing plants you have. Or how many you own… or anything.

WSJ: An important issue: If The Journal were to do stories about your other interests -- and they were stories that you didn't like -- how would you deal with that? Would you expect to be informed about what we're writing?

Mr. Murdoch: No. I'd complain like hell if they were incorrect. I would imagine I'd know because you would have been questioning me like you are now. But you'd have to run what you like. The only thing I complained about is when they attacked my wife. And as Paul (E. Steiger, former managing editor of The Wall Street Journal ) said in a public statement, nothing unusual about it [my call to the paper], and nothing inappropriate, was said.

WSJ: Would you take any action against the people who wrote that story?

Mr. Murdoch: No. They're gone.

WSJ: But some aren't.

Mr. Murdoch: Well, then don't tell me what their names are. I know what motivated the story … I'm sensitive.

WSJ: Some people have said that if you buy The Journal, there would be a perception if we did a story about Viacom or Time Warner that you would be behind it. Even if we would have run a story anyway.

Mr. Murdoch: I tell you if you do a story about Viacom, I'll have … [chairman Sumner Redstone] on the phone for two days running. But I won't even tell you about it… What if you do a story on Fortune Magazine or Time Inc. or whether you do a story about the New York Times, you do it all the time, people can say the same things about you, right now.

WSJ: No one would dispute that in the history of journalism, you're a major, major figure. But there's quite a few people who feel you're not a positive figure. Does that bother you?

Mr. Murdoch: No… I've been around a long time. I've got a thick skin.

WSJ: When Fox News launched there was a double-page spread in the Post talking about this great new channel. Would that have been something that you asked them to do? Or would that have been something they would have done on their own?

Mr. Murdoch: I think they would have done it on their own. We're all in it together. We're a pretty close company. They didn't do it to say, "Let's suck up to Murdoch or this or whatever." They'd like to see it succeed probably. I don't remember.

WSJ: You wouldn't use The Journal in any such way to promote the launch?

Mr. Murdoch: No. Now I would imagine that the launching of a major news channel would get noted.

WSJ: Do you think you'll face any competition for Dow Jones?

Mr. Murdoch: Not from anybody that I've seen mentioned yet. I mean, if someone like Google comes in and starts throwing around their funny money, who knows But I don't think. Look, the country's been combed…

WSJ: So are you confident at this point that it's yours?

Mr. Murdoch: No. I'll see what demands they make at this first meeting. If they're reasonable, then they should be OK. And Then we'll see what they go into… There has been so much publicity, I don't think it's necessary to put an investment bank on this for two months looking for other bids, and I think that would create an uncertainty about the whole company which would be bad for the company. But you know, they'll do what they will do.

WSJ: The Tribune company was shopped around for quite a while.

Mr. Murdoch: Yeah, but there weren't any buyers.

WSJ: There was one in the end.

Mr. Murdoch: For $90 million. Risk. That's in the figures …

WSJ: Why didn't you do it?

Mr. Murdoch: Don't want to spend the rest of my life going through that, getting rid of people, ugly. I think they're in decline, they can fire a few hundred people everywhere, save a couple of hundred million dollars ... I guess they will have a billion a year to pay down the debt, that's what it sounds like. No, a bit less … I would have thought that, although the decline in readership … will probably go on…

WSJ: They're all going to MySpace.

Mr. Murdoch: I wish they were. They're all going to Facebook at the moment.