Friday, June 01, 2007

Warren Phillips on Dow Jones, Competence and Codies

CJR Daily's Audit section jogged my memory about one of the more significant (and unintentionally funny) recent writings on the Dow Jones-Murdoch faceoff -- a letter to the editor of the New York Times last week by former Dow Jones CEO Warren Phillips.

I had planned to write about this at the time, but I never got around to it (this is, after all, a hobby blog). But since The Audit's full-time staff found it worthy of mention, I guess I will too.

His letter demonstrates anew the validity of the old maxim, "Never write a letter if you can help it." Commenting on a harsh but perceptive column by Joe Nocera on the inept management of Dow Jones, Phillips defended his and his successors' stewardship (or should that be stewardships?) of the company.

It was such a stirring, persuasive defense that it convinced me that Nocera was dead-on right.

Some selections from Phillips's missive:

"As recently as Jan. 30, 2005, The New York Times itself, on Page 2 of its Sunday Business section, praised me for ''presiding over the most successful financial era in the history of Dow Jones & Company.''' Hello? You left seventeen years ago, kemosabe.

"Fortune magazine ranked Dow Jones for five straight years -- 1983-87 -- among America's 10 Most Admired Corporations, citing the quality of its products and, in 1987, its ''value as a long-term investment.''' Really wish I had my time machine so I could cash in on that!

Still more blasts from the past ("In 1981, The Wall Street Transcript reported 60 media specialists and financial analysts had chosen me ''the best chief executive in the publishing industry.''" You don't say!) until he heaps praise on his successor Peter Kann:

"Under Mr. Kann's leadership, Dow Jones built the largest paid subscription news site on the Web, winner of the Codie Award for ''Best Online News Service.'''

OK, the "Codie Award" is prestigious (though I had was unacquainted with it, as I indicated in an earlier version of this item), but that hardly outweighs disasters like the Telerate deal, which began on Phillips's watch.

Phillips made the basic, P.R. 101 mistake of attacking a small portion of an article, rather than making any effort to deal with its overall point, which was really irrefutable. He was not only unconvincing, but he came across defensive and thin-skinned. He also sort of confirmed the point of the article, by showing that management can't even write a convincing letter to the editor.

I mean, the stock has been in the toilet for seven years, for heaven's sake. That's what made the company vulnerable to a takeover in the first place. Not a word about that.

I'm grateful to The Audit for reminding us about this letter, which really needs to be read and savored now that it appears that a Murdoch takeover is inevitable. Here we have the immortal words of one of the CEOs who made it all possible.

While I'm sympathetic to the company's fight for independence, lets not kid ourselves that this was a well-managed company from a financial standpoint. That is why it is a shame that this is a public company, as I pointed out in my Salon article.

The Audit's piece was less long-winded than usual and referred to itself in the third person only once, which is an improvement. The article quotes from U.S. Grant's memoirs.

I would suggest that Dean Starkman make note of a stylistic point: Grant did not refer to himself in the third person. I guess he must have known it is annoying.

© 2007 Gary Weiss. All rights reserved.


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

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