News and legacies

August 02, 2007

In Hagerstown, the afternoon Daily Mail will stop publishing Sept. 28, after 179 years in print. In New York, The Wall Street Journal passes into the hands of News Corp. Both newspapers have been owned by families that felt some degree of obligation as stewards of a public trust, and that are parting with them reluctantly - but that bowed in the end to the overwhelming force of the market. The tiny Daily Mail and the hugely influential Journal were struggling with the same question: Is there any point in waiting for a turnaround in the newspaper business?

In Hagerstown, the answer was to fold the Daily Mail, with dwindling circulation, into its morning counterpart. The Journal has had a different problem: a loss of advertising, and a belated recognition by the members of the Bancroft family who control its stock that the company has been indifferently managed for years.

The usual solution in such a case is not to tighten up management, which can be difficult for a clan of third-generation heirs to carry out, but to sell out to someone who will come in, slash spending and try to extract more cash from the company.

The Journal found itself, instead, at the mercy of Rupert Murdoch, who wants it for vanity or synergy (or both) and was willing to pay 67 percent over the market price to get it. He promised to increase its news spending and add pages. No one doubts him, because he has been content to run papers in Australia, London and New York at a loss for years. Once his offer became public, the choice, realistically, was to go with him or go with the guy with the chainsaw.

Mr. Murdoch's heretical idea seems to be that a newspaper's value isn't measured only in profits. If it gives him a platform, or helps build up the new Fox business channel he's launching, or provides a branding veneer of respectability to News Corp. - any or all of those might be worth it.

It raises the interesting notion that a newspaper is not exactly the same sort of thing as a widget manufacturer, though you'd be hard-pressed to get that idea past Wall Street. Some think the future of print journalism might lie with foundations such as the one that operates the St. Petersburg (Fla.) Times, but it could perhaps also see a revival of the swashbuckling press barons - and the agendas they hold dear.

Critics worry that Mr. Murdoch will ruin the Journal. If he does, something else will rise up to take its place. The future of newspaper cash flows may look problematic, but the newspaper itself is as essential as ever. Someone's always going to want to run one - and, in one form or another, to read one.

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