by Les Hinton
Rupert didn’t speak for long. He acknowledged that everyone was nervous and recognised the high standards The Journal had achieved, but added pointedly: ‘If anything, you’ll find we set a higher bar.’
‘But I hope it’s a day of excitement,’ he said. ‘Because it is a new day in the history of this company. We’ve come here to expand it, to develop it, and, where possible, to improve all of its products.’
He finished with a smile and a hint of menace. ‘You’d better get back to work, and make sure you’re not scooped tomorrow.’
At Dow Jones the morning after Rupert’s speech, I arrived early at my new corner office. At my door was a bagful of baseball caps, t-shirts, and other items bearing The Wall Street Journal’s brand. A note was attached: ‘Good morning and welcome to Dow Jones,’ it said. It was signed by a woman who was among the executives to be fired over the next few days. The ugliest part of the first few weeks of an acquisition is the dismissals. You can’t be a boss without firing people, and you can’t be a good boss if you ever get used to it.
I asked dozens of senior people to resign over the years. Many hundreds more departed because of decisions I made, or enforced for Rupert. I cut costs, closed publications and businesses, pushed out editors and executives, always convincing myself it was for the greater good of the company and its remaining employees.
At Dow Jones in the first few weeks, a swathe of senior people departed. Rich Zannino, who had been CEO for two years, went immediately, but he knew Rupert would want his own person in charge. Others followed Zannino, including the publisher, and the heads of legal, finance, marketing, and human resources. The most senior survivor on the business side was Todd Larsen, a tall, thoughtful former Booz Allen consultant with deep family roots in media — his grandfather was Roy E. Larsen, Henry Luce’s right-hand man from the dawning days of the Time Inc. publishing empire. Todd was to become my number two.
Getting to know senior people in those first weeks, I told myself to follow the same rules and routines I had in every new job: remember it’s high pressure adjusting to new bosses, so be wary of first impressions. Nerves can conceal talent, and glib confidence can disguise a fraud; pay attention to the quiet ones, encourage them to speak. Jump on anyone who derides the ideas of others, even if they are dumb — great things often come from uninhibited, free-flowing conversations.
On my first day, an earnest, white-haired man arrived in my office. He was Joe Cantamessa, a former FBI agent now in charge of the company’s worldwide security. He was here, he said, to discuss my safety. I would have a personal driver who would carry a gun at all times, he told me, and the car in which he would drive me contained special security features.
Already unnerved, I followed him to the underground car park and opened the back door of a black Lexus. ‘This is in case of emergency,’ he said, lifting the top of the armrest in the back seat and pointing to a red button. ‘You press it if someone tries to abduct you.’
When you activate the silent alarm, he said, Dow Jones security would be alerted and instantly begin tracking the vehicle through a device hidden inside the car.
‘If this happens, we will also call the car phone. It will appear to be a normal call from your office,’ he said. ‘If you are in difficulty, you will use a secret phrase which we can agree on now. It must be something inoffensive to your abductors, but if you say it we will know you are in trouble.’
I decided my secret sentence would be: ‘Remind me later to work out my weekend plans for next month.’ At least, it was something like that; as the years passed, and I cruised uneventfully around New York City, the details of my coded cry for help grew foggy.
The prospect of being kidnapped in Manhattan did not seem high on the list of life’s risks. There were more banal but real hazards; no armed driver or panic button helped on the day a careless driver ran a red light and crashed into us.
Joe Cantamessa also inspected the townhouse we had rented on East 65th Street. Given our neighbour was David Rockefeller, one of the richest people in town, it must have been among the city’s safest blocks. Rockefeller was 92, the last surviving grandchild of the nineteenth-century industrial baron John D. Rockefeller, and his huge house sprouted security cameras. There were often police cars outside, and a retinue of nurses and bodyguards accompanied him whenever he faltered past our door on his walking frame.
Cantamessa terrified Kath with demonstrations of how easily our new home could be broken into, and explained he had refined his own burgling skills at the FBI, where one of his duties was to break into homes of mobsters to install bugging equipment. Kath didn’t argue when he offered to install a range of devices to keep us safe.
This concern for security stemmed from a terrible event six years earlier. In January 2002, five months after his colleagues had watched an act of war from their office windows, Daniel Pearl, a reporter for The Wall Street Journal, was kidnapped and beheaded in Pakistan by Islamist militants connected to Al-Qaeda. He was 38 years old. His only child was born four months after his murder. The grief, anger, and fear Pearl’s death created was still profound when I arrived at Dow Jones, and, apart from the exaggerated precautions extended to me, Dow Jones undertook serious work to heighten the safety of its staff in troubled areas around the world.
Dow Jones had about 6000 staff, including more than 2000 journalists who worked in the most peaceful and prosperous countries on earth, as well as some of the most dangerous and deprived. Most of the journalists concentrated on business and economic news, but The Journal’s definition of these subjects was broad. Despite its name, The Wall Street Journal never looked at the world from the elite perspective of Wall Street or the City of London.
Bernard ‘Barney’ Kilgore, the son of an Indiana school superintendent, was the acknowledged creator of the modern The Wall Street Journal. More than any member of the Bancroft family, he had driven the newspaper’s success and crafted its down-to-earth approach to business news. Kilgore’s ideal newspaper was straight talking, and as accessible to the small car dealer in Tulsa as it was to the boss of J. P. Morgan. He crusaded for plain English and sent sharp missives whenever he was unhappy. Richard Tofel, in his Kilgore biography Restless Genius, quotes one of his most famous: ‘If I see ‘upcoming’ in the paper again, I’ll be downcoming and someone will be outgoing.’
Tofel says Kilgore treated readers as if they were interested but not necessarily experts. He told his journalists to write not only for bankers, but also for the ‘almost infinitely more numerous bank depositors’.
‘Financial people,’ he said, ‘are nice people and all that, but there aren’t enough of them to make this paper go.’ Business news, Kilgore decreed, ‘embraces everything that relates to making a living’.
Forty years after his death in 1967, aged only 59, Kilgore still had a saintly reputation among veteran staffers. My granddaughter, Samantha, was at school with Kilgore’s, and when their class visited The Journal, it was as if a little Dalai Lama had arrived.
But Rupert wanted a newspaper that stretched far beyond business, and we increased the foreign and political pages as well as adding lifestyle news and a solid Review section to a fattened Saturday edition. We also launched a glossy magazine — WSJ — that eventually became a monthly. In digital, we deepened the website, added hours of video, and in 2010 created an iPad edition — a novelty at the time, and very successful with readers.
A new daily section — ‘Greater New York’ — increased our sales in the heartland of The New York Times, which gave us great pleasure. We enjoyed watching our vendors, in their The Wall Street Journal livery, handing out free copies on the doorstep of The New York Times Eighth Avenue headquarters.
We added more space to the opinion section. To many American conservatives and libertarians, The Journal opinion section was a temple of clear thinking. To liberals, it was a constant bugbear. Rupert had a few quibbles about its policy posi
tions; unlike The Journal, for instance, he supported stronger gun control laws, but he was proud to be associated with its outlook on almost all other matters.
In common with other US newspapers, journalists at The Journal exist in two divisions. There are two editors — one in charge of news, the other of the opinion pages — who report independently to the publisher. Opinion was run by Paul Gigot, a snowy-haired veteran whose editorials, whether or not you agreed, were the most deeply researched and cogently argued of any American newspaper.
The relationship between news and editorial was polite, but never warm. Many news journalists did not share the conservative views expressed in editorials, and opinion writers regarded their news colleagues as being, on occasion, too soft and liberal. The relationship between these two sides was not aided by the difference in the quality of their offices; the editorial department enjoyed comfortable cloisters on the corporate floor, far superior to the threadbare news space downstairs in steerage.
The opinion section of The Wall Street Journal website expressed its principals clearly: ‘The Journal stands for free trade and sound money; against confiscatory taxation and the ukases of kings and other collectivists; and for individual autonomy against dictators, bullies, and even the tempers of momentary majorities.’
The Journal editorials had not endorsed a presidential candidate since a bad experience in 1928 when it declared Herbert Hoover, ‘the soundest proposition for those with a financial stake in the country’. The Journal editors had second thoughts eight months after Hoover became president and the Wall Street market crash of October 1929 triggered the Great Depression.
Every acquisition brings surprises and crises, but we had no idea of the nightmare ahead when we took over Dow Jones. Days before the handover, we were presented with a budget packed with rosy expectations. We also had our own ambitious and expensive plans.
The first bold idea was Rupert’s. He wanted to stop charging users to access The Wall Street Journal website. In 2008, website pay-walls were an unfashionable concept, but from the launch of The Journal’s first digital edition, customers had been required to pay for full access.
All News Corp’s other newspaper websites were free to use, and almost everyone in the industry thought pay-walls were a bad idea. The belief then was that advertising would pay for everything. Rupert was spending a lot of time with digital experts and they were telling him the same thing.
But subscription revenue at The Journal had reached $60 million a year and was growing. Robert and I didn’t want to give that up. The entire Dow Jones executive team hated the idea of knocking down the pay-wall, and I organised a meeting with Rupert so they could tell him so. It did not go according to plan. They knew he was determined to drop the pay-wall, and no one was brave enough to stand in the path of an oncoming Rupert Murdoch. The only person to speak up was the head of digital. When Rupert asked him what he thought he replied in a shaky voice that going free was a ‘great idea’.
Robert and I exchanged a despairing glance, but stayed quiet — as ever, it wasn’t a good idea to argue with Rupert in a room full of newcomers. My approach with Rupert, and every direct boss who preceded him, was to say: ‘You are the boss. I will do as you wish. But before you decide, it’s my job to make sure you understand my side of the argument.’ This was especially necessary with Rupert. On a couple of occasions, when things went wrong, he told me: ‘You should have made me listen.’
I went through the numbers with him later and told him that, while we could change our minds at any time and drop the pay-wall, it would be hard to bring it back once we had killed it. He relented. Within a year Rupert, Robert, and I were like missionaries, making speeches all over the world about the foolishness of newspapers giving away valuable content.
By then, the economic crash of 2008 had crushed the world and shredded the business plan we had inherited at Dow Jones; many millions of dollars in advertising had evaporated. It was a brutal time for all businesses, but particularly hard on newspapers already squeezed by the relentless drift of readers and advertisers towards digital.
For Dow Jones, in addition to lost advertising, we faced pressure from the clients of our business service divisions — banks, big investment funds, and private equity — who cancelled their contracts or demanded better terms.
We had already achieved millions in the savings that come when big companies merge. We had integrated back office functions such as finance, legal, human resources, and purchasing — News Corp was one of the world’s biggest newsprint buyers and The Journal shared the discounted prices. We closed 9 of the 17 print plants Dow Jones owned, and instead made deals with local newspapers whose dwindling sales meant they had hours of spare printing capacity. We raised almost $1 billion by selling the Dow Jones Industrial Average business, and the company’s share of a European indexing business, STOXX Ltd. We also froze all salaries for two years.
The crash was painful for Dow Jones, but it was also the biggest economic story since the Great Depression, and we were now publishers of the world’s most respected business newspaper. Interest was so intense that The Journal’s audience kept growing even as we increased prices to readers and online users.
Other ‘general interest’ newspapers were making ever more desperate cuts — closing overseas bureaus, firing staff, and reducing the size of their newspapers. In Detroit, newspapers stopped making home deliveries for four days every week; they couldn’t afford the petrol and trucks.
The New York Times cut pages and fired journalists in the biggest cutbacks in its history. To help it through the crisis, the Times Company raised $225 million by selling and leasing back part of its Manhattan headquarters and accepting a high interest — 14 per cent — loan of $250 million from the Mexican billionaire Carlos Slim, with warrants allowing him to convert the loan into shares.
Rupert, having already spent $5 billion, urged us to press ahead with our expansion. With our enlarged print edition more competitive in general news and features, we mounted circulation drives in the biggest markets, including Los Angeles and Chicago, promoting our added coverage at the same time local newspapers were cutting theirs.
Within two years, The Journal was the country’s biggest selling newspaper, with print and digital sales exceeding 2 million, surpassing the perennial bestseller, USA Today.
When the recession was at its deepest, the trade newspaper Editor & Publisher reviewed the devastated state of publishing company stock prices. It calculated that, had Dow Jones remained independent, its stock would be trading around $9–11, compared with the mid-thirties price range when News Corp made its bid of $60. News Corp might not have timed its purchase ideally, but it was the saviour of Dow Jones. The old management would have been forced into far more brutal cutbacks. News Corp, with its deep pockets and grand plans, saved hundreds of jobs and kept the company intact.
Before the worst of the recession, we had committed lavishly to move the entire operation out of its dismal downtown premises to new offices at the News Corp headquarters on Sixth Avenue, near the Rockefeller Center.
It was, without doubt, the finest newspaper office News Corp had ever built. The heart of the existing Sixth Avenue building was gutted and hundreds of people displaced to neighbouring buildings to make room for us.
The News Corp headquarters was forever restructuring to accommodate new businesses. It could get confusing knowing who was where. One facilities executive took advantage of this by carving out his own secret apartment, which he stocked with wine and food from the executive kitchen. He was caught one morning, wearing a dressing gown as he picked up the morning newspapers, by the early and untimely arrival of his boss.
Most of the time, journalists are a conscientiously cynical breed and only very occasionally visibly pleased. But many of them were gleeful the day we popped champagne to celebrate the escape from our drab downtown workplace. At the democratic new Journal, most private
offices were eliminated, and those that remained were denied window views, allowing everyone to share the rare direct daylight of high-rise Manhattan.
At the heart of the newsroom was a huge, horseshoe-shaped desk surrounded by giant screens. It looked like the NASA control centre or the Starship Enterprise. Walls of video displayed news and market numbers. Radio and television studios were constructed to feed websites and our syndicated radio bulletins. In a glass-faced office overseeing it all, sat Robert Thomson, like a taller, thinner Captain Kirk.
Four months after the acquisition, Robert had moved from the job of publisher to that of editor-in-chief. Marcus Brauchli had resigned. Brauchli was a gifted journalist — within three months, he became executive editor of The Washington Post — but a new owner can be impatient, and an old hand can have difficulty making desired changes. Brauchli had been at The Journal for 20 years. Rupert had always wanted Robert as his editor-in-chief, and Brauchli knew it.
His resignation didn’t please the ‘special committee’ that News Corp had agreed to put in place to protect editors from management interference. The committee’s five members — two academics and three senior editors recalled from retirement — knew nothing until Brauchli had quit. They complained bitterly — and publicly — they had been deliberately kept in the dark.
Brauchli was emphatic that there had been no management meddling while he was in charge, saying in his resignation statement: ‘the new management scrupulously has avoided imposing any political or business viewpoints on our coverage and rigorously has enforced the code of conduct.’
Still, the committee felt they had been poorly treated. I made a public apology and promised to act with more care in future.
In selecting Brauchli’s successor, we followed the rules meticulously. We nominated Robert and the committee invited him to appear before it to scrutinise his qualifications. It was surprising how nervous Robert was as he went off for his interview, dressed in his best tight-fitting Zara suit, black skinny tie, and lethally-pointed shoes. Rupert and I were more relaxed, sitting with glasses of white wine at the quiet bar of a Turkish restaurant in 47th Street next to the office, waiting for him to return from his interrogation. He joined us after a couple of hours, still apprehensive — ‘I think it went okay’ — and drank his first glass quickly, which was unusual for him. The committee’s verdict was unsurprising: ‘News Corp has made an excellent choice.’