Backstory

1. The Wall Street Journal: A Beacon of Journalistic Excellence Amid Corporate Challenges

"The strengths of the Journal are obvious. Its daily circulation (1,820,600) is exceeded in the United States only by that of USA Today (2,162,454); if one adds the paper's electronic subscribers who do not subscribe to the newspaper—there are almost four hundred thousand of them—the Journal ranks No. 1."

Unparalleled reach and influence: The Wall Street Journal stands as a titan in American journalism, boasting a massive readership that spans both print and digital platforms. Its influence extends far beyond mere numbers, shaping the economic and political discourse of the nation.

Financial challenges: Despite its journalistic success, the Journal faces significant business hurdles:

• Reliance on the volatile financial and technology sectors for advertising revenue
• Pressure to diversify revenue streams in a rapidly changing media landscape
• Competition from digital-native news sources and financial information providers

Commitment to quality: In the face of these challenges, the Journal has maintained its commitment to high-quality journalism, investing in new sections and expanded coverage even during economic downturns.

2. The Bancroft Family's Stewardship: Balancing Tradition and Financial Pressures

"The Bancroft family has owned Dow Jones since the beginning of the twentieth century, and has steadfastly spurned overtures to sell, but its resistance may be softening."

A legacy of independence: For over a century, the Bancroft family has safeguarded the Journal's editorial independence, viewing their ownership as a public trust rather than merely a business venture.

Growing tensions: As Dow Jones faces financial pressures, some family members are questioning the wisdom of maintaining control:

• Concerns about the company's ability to compete with larger media conglomerates
• Desire for greater financial returns on their investment
• Generational shifts in attitudes towards family ownership of media properties

The dilemma of sale: While the family remains committed to the Journal's mission, they are increasingly open to considering offers from potential buyers, particularly those who might preserve the paper's editorial integrity while providing greater financial stability.

3. Peter Kann and Karen Elliott House: A Power Couple Shaping Dow Jones

"Kann and House were a highly visible couple in those days; Dow Jones often provided a helicopter to ferry them between New York and Princeton."

Journalistic pedigree: Both Kann and House rose through the ranks of the Journal, earning Pulitzer Prizes and respect for their reporting before assuming leadership roles at Dow Jones.

Controversial leadership: Their dual roles at the top of the company have sparked criticism and concern:

• Accusations of nepotism and conflicts of interest
• Questions about the balance of power between editorial and business concerns
• Debates over their management style and strategic decisions

Legacy and challenges: While credited with maintaining the Journal's journalistic standards, Kann and House face scrutiny over Dow Jones' financial performance and ability to adapt to the changing media landscape.

4. Robert Bartley's Editorial Page: A Conservative Force in American Journalism

"Bartley treated Whitewater as if it were Watergate, devoting to it what turned out to be more than three thousand pages of editorial and op-ed columns, which were later anthologized in six volumes."

Ideological influence: Under Bartley's leadership, the Journal's editorial page became a powerful voice for conservative economic and political thought in America.

Key aspects of Bartley's editorial approach:

• Championing supply-side economics and free-market policies
• Aggressive criticism of liberal politicians and policies
• Willingness to pursue controversial topics and conspiracy theories

Editorial independence: Despite occasional conflicts with the newsroom and criticism from the Bancroft family, Bartley's page operated with remarkable autonomy, shaping conservative discourse for decades.

5. The Telerate Debacle: A Cautionary Tale of Misguided Expansion

"By 1997, Kann says, 'we knew we had to invest or get out.' In January, Dow Jones announced that Kann and the board of directors had unanimously approved a proposal to spend $650 million over the next three to four years to jump-start Telerate."

A costly mistake: The acquisition and subsequent failure of Telerate, a financial information provider, became the most significant business challenge of Kann's tenure as CEO.

Factors contributing to the Telerate failure:

• Underestimation of competition from Bloomberg and Reuters
• Reluctance to invest heavily in upgrading technology
• Misalignment with Dow Jones' core competencies

Long-lasting consequences: The Telerate debacle drained resources from other potential investments, limited Dow Jones' ability to diversify, and damaged the company's reputation on Wall Street.

6. Paul Steiger's Leadership: Navigating the Journal Through Turbulent Times

"Steiger is now the longest-serving managing editor in the Journal's century-old life."

Editorial excellence: Under Steiger's leadership, the Journal has maintained its reputation for high-quality journalism, winning numerous awards and breaking major stories.

Key aspects of Steiger's tenure:

• Expansion of investigative reporting and long-form journalism
• Adaptation to digital platforms while preserving print quality
• Skillful management of newsroom morale during periods of corporate turmoil

Challenges ahead: As Steiger approaches retirement, questions loom about succession and the future direction of the Journal's newsroom.

7. The Digital Revolution: WSJ.com's Successful Subscription Model

"The gamble resulted in the Web's largest subscription site; 686,000 subscribers paid either $79 annually if they did not subscribe to the newspaper or $39 dollars if they did."

Pioneering paywall: While other newspapers gave away content online, the Journal successfully implemented a subscription model for its website.

Benefits of the WSJ.com strategy:

• Creation of a significant new revenue stream
• Preservation of the value of Journal content
• Establishment of a loyal digital subscriber base

Future potential: The success of WSJ.com positions the Journal well for a digital-first future, with the possibility of online subscriptions eventually surpassing print circulation.

8. Succession Planning: The Search for Dow Jones' Next Generation of Leadership

"A Bancroft family board member says that choosing Kann's eventual successor is 'the biggest issue the board will wrestle with this year.'"

Critical decision: The selection of new leadership for both the CEO and managing editor positions will shape the future of Dow Jones and the Journal.

Key considerations in the succession process:

• Balancing journalistic experience with business acumen
• Addressing potential conflicts of interest and nepotism concerns
• Preparing for a rapidly changing media landscape

Potential candidates: The board is evaluating both internal candidates (including Richard Zannino and Gordon Crovitz) and the possibility of bringing in outside leadership.

9. The Struggle for Independence: Resisting Takeover Attempts and Merger Proposals

"Many companies—Rupert Murdoch's News Corp., Gannett, Pearson PLC, General Electric, Microsoft, Bloomberg, and Warren Buffett's Berkshire Hathaway, among others—have expressed interest in buying Dow Jones."

Persistent suitors: Dow Jones' valuable brand and influential position have made it an attractive target for larger media companies and conglomerates.

Factors complicating potential sales or mergers:

• The Bancroft family's desire to maintain editorial independence
• Concerns about integrating the Journal into larger corporate structures
• The challenge of finding a buyer aligned with the Journal's values and mission

Uncertain future: While the Bancrofts have historically resisted selling, changing market conditions and generational shifts within the family may eventually lead to a change in ownership or structure for Dow Jones.

Last updated: July 22, 2024