May 14, 2007
The Wall Street Journal gave itself a black eye last month by withholding the sensational news that media baron Rupert Murdoch was trying to buy its owner, Dow Jones & Co. Murdoch submitted a $5 billion bid in mid-April to the Dow board. Journal editors learned about it around that time but didn’t tell their readers until after the story was broken by cable network CNBC two weeks later.
Why did the world’s top business newspaper sit on one of the year’s top business stories? The tale, disclosed initially not by the Journal, but by its uptown rival, The New York Times, is full of ironies: Murdoch emasculating the news organization he was pledging to protect; professional duty stumbling over company loyalty; a tenet of journalistic principle fashioned into a gag to silence a newsroom and keep it from its core mission getting publicly significant information before the public.
Here’s what happened, according to The Times and a later account in the Journal. After a first approach to Dow Jones CEO Richard Zannino at the end of March, Murdoch, head of multinational media giant News Corp., submitted a takeover bid to the Dow board on April 17.
Some days later Murdoch sent an e-mail to Paul Steiger, the Journal’s top editor, marked “Personal and Confidential.” In it, Murdoch told Steiger, who was a week away from retirement, of the bid and, The Times reported, offered “his reassurances that he would uphold the editorial integrity of The Journal if he were successful.” At least four other senior editors learned of the e-mail.
Steiger reportedly felt honor-bound by Murdoch’s confidentiality assertion. People within the Journal are adamant that Steiger did not consult with anyone on Dow Jones’ corporate side before deciding not to assign anyone to report Murdoch’s plans.
So, although word of the bid was racing through various Wall Street law and investment firms, and Dow shares were moving in value thanks to shadowy purchases that the Security and Exchange Commission is investigating, the Journal reported nothing until after the story broke on May 1, and Dow’s shares jumped from $36 to $58.
So what have we got? An aggressive captain of industry engineering a signature acquisition of one of the world’s most respected news organizations. A direct overture to the editorial chief of that organization undertaken, explicitly, to neutralize a likely source of in-house resistance to his acquisition. And embedded in that overture, a disclosure of strategic purpose, news that was moving financial markets and was of plain public interest.
Key to Murdoch’s overture was confidence that his assertion of confidentiality would be accepted as a binding prohibition on the Journal to keep it from doing what it otherwise would have done: report the news. The e-mail did more than tie Steiger’s hands; it immobilized his entire newsroom.
So did the Journal do the right thing? Or is this another instance of an honorable journalistic custom, rooted in an obligation to ease the flow of sensitive news from apprehensive sources, used instead to protect the powerful and conceal intrigue?
The Journal itself offered a different view in a story last week. Referring to the editors who knew about Murdoch’s e-mail, the article declared: “But as members of the Dow Jones senior management team, they were bound to keep the information confidential.”
Hello? So the Journal’s top editors owe their principal duty to Dow Jones? In this matter only, or in general? Maybe they should hold their editorial meetings in the boardroom?
Assuming instead that Journal editors are journalists before they are Dow senior managers, the problem boils down to this: Did Murdoch’s assertion of confidentiality obligate Journal editors to keep his secret? Or does confidentiality rest on an agreement, to which the parties to the secrecy must consent?
Put another way, why couldn’t Steiger have replied to Murdoch, “Sorry, I’m not your confidant, I’m the editorial chief of one of the world’s great newspapers. You’ve misjudged in presuming my willingness and, by extension, that of the newsroom I lead to tacitly collaborate in your plans?”
He might then have withheld some details but still assigned reporters to learn whether Dow Jones was actually in play.
Instead, it appears that Murdoch’s unsolicited disclosure had the effect not just of neutralizing the paper’s editorial side as an internal political adversary, but of crippling it as a journalism organization. An inauspicious opening for what has been billed as the aging media buccaneer’s quest for journalistic respectability.