Tuesday, May 08, 2007

How to Guarantee No Coverage in the Wall Street Journal

Let's say you're a corporate raider and you don't want to be written about in the Wall Street Journal. How do you guarantee the Journal won't write about you? Simple: just send a memo to the managing editor marked "personal and confidential."

That apparently will do the trick, according to this morning's New York Times. Seems that Journal managing editor Paul Steiger learned about the Rupert Murdoch takeover offer several weeks ago, directly from Murdoch himself.

According to people briefed on the situation, Mr. Murdoch first approached [Dow Jones CEO Richard] Zannino the week of April 9, and they had a breakfast meeting at which Mr. Murdoch expressed his interest in buying Dow Jones. Mr. Murdoch then submitted a letter to the Dow Jones board on April 17, formally making an offer.

Several days after that, he sent an e-mail message marked “Personal and Confidential” to Mr. Steiger telling him of the bid, and offering his reassurances that he would uphold the editorial integrity of The Journal if he were successful.

Mr. Steiger felt bound by the “confidential” nature of his communications with Mr. Murdoch, according to people within Dow Jones, and it weighed heavily on his decision.

I don't see why. The email was (presumably) unsolicited and there was no agreement beforehand to keep the contents of the email confidential. While I can understand why Steiger wouldn't want to blast it over the front page, I can't see how he and the rest of the paper could have just sat on this explosive news for weeks, without attempting to publish it.

If Murdoch had wanted Steiger to keep the bid confidential, he should have called him and said, "Paul, I have something sensitive I'd like to discuss. Can we go off the record?" If Steiger then said "Yes," his lips would be sealed forever. Murdoch ought to know the protocol by now; he always talks about how he is a "lifelong newspaperman" etc. etc.

It's unclear from the Times story if legal constraints, or advice, might have prevented Steiger from running with the story. But he did make it clear that the front office had no role, telling the Times: “Rich Zannino never spoke to me or communicated in any way about the situation — and neither he nor anyone else at Dow Jones corporate was involved in any way, either directly or indirectly, in The Wall Street Journal’s news decisions.”

In the end, it was leaked (probably from the Murdoch camp) to CNBC, so the Journal wound up being scooped on its own story.

I have more to say about the Murdoch offer, in an article that goes live tonight elsewhere on the web.

UPDATE: Dean Starkman of CJR Daily's "Audit" section agrees with me. That's nice, but I really wish Dean would stop referring to himself in the third person. Or, just to rephrase, "This blog really wishes Dean would stop referring to himself in the third person."

© 2007 Gary Weiss. All rights reserved.


Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

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