If Rupert Murdoch has indeed landed Dow Jones for $US5.5 billion, it will be the crowning glory of his remarkable 55-year empire building crusade that started in sleepy Adelaide way back in October 1952.
Despite paying a 100% premium, there are numerous synergy opportunities that the Sun King will no doubt seek to exploit. But that doesn’t mean it will necessarily work well for shareholders. After all, the risks are highlighted by the fact News Corp shares today fell 25c to a 10-month low of $26.20.
The biggest risk Rupert faces is a revolt by many of the 2,000 Wall Street Journal journalists. It would be easy for a group of them to set up a direct rival to The Journal ’s website offering and, with some capital backing from, say, a cashed-up Bancroft family, a rival paper version in the US would not be out of the question.
While Rupert has signed up to an editorial straight-jacket that will prevent him from directing The Journal ’s editor to give a gushing front page boost for one of his dodgy mates like jailed junk bond king Michael Milkin, there’s still plenty of scope for trademark News Corp moves on the corporate front with Dow Jones.
To start with, expect The Journal’s bloated editorial budget to be cut and the cover price of the lucrative US edition to be lifted. The struggling European edition might go the other way with a cover price reduction to drive circulation and seriously take on The Financial Times on its home turf.
The obvious synergy of more content for the impending Fox business channel that will take on CNBC has been often mentioned, but another no-brainer would be using STAR TV’s remarkable footprint in India to launch an Indian edition of The Journal as the world’s second most populous country comes into the first world.
Like many Murdoch critics, at some levels I’m aghast at the prospect of a bloke who still pumps out page three girls across the UK and championed the Iraq war is now in charge of the world’s most prestigious newspaper property.
However, Rupert won’t be stupid enough to destroy the paper’s legendary reputation for editorial credibility after writing out the biggest cash cheque in News Corp’s history.
There’s even a chance that all this intense focus on his shoddy editorial record and practices will lead to higher standards across the empire now that’s he’s signed up to being a good boy at The Journal .
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