Forman’s comment was striking–so striking that when the Times posted an edited transcript of the call on the company’s Web site, the exchange had disappeared entirely. But that has more to do with the decorous (and unspoken) rules governing public pronouncements about competitors than a sense that Forman was incorrect. Within days, an unedited version of the transcript was being forwarded around the Journal’s newsroom where, if anything, the disgruntled staff felt Forman was being generous. “That was an understatement, if you can believe it,” one Journal reporter says.
It has been almost a year since Peter Kann, the chairman, chief executive officer and editorial director of Dow Jones, the company that owns the Journal, handed off the title of publisher of the Journal to his wife, Karen Elliott House. It hasn’t been a smooth transition. House, who couldn’t be reached to comment, has a reputation for being a volatile and temperamental manager, and the company’s continued slump has helped foment internal unhappiness during a time when the Journal is excelling journalistically. The Times’ surge in tech and financial ads isn’t a totally fair comparison–tech and finance make up a small percentage of the Times’ total advertisements, and they make up the majority of the Journal’s. But that reality is doing little to quell the sense, both within the Journal and outside the company, that Dow Jones is struggling.
Complaining about management is the stock in trade of many news organizations, but at the Journal the normal, under-the-breath moaning is nearing a full-throated revolt. Earlier this year, Journal staffers continually leaked their dissatisfaction to the New York Post, hoping to spark a magazine-length investigation of the paper’s problems and House’s leadership. Town-hall style meetings that management has had with staff have been less than civil. And it’s not just normal griping about bad pay and lack of appreciation.
“The company did very little to prepare for the downturn,” says one reporter who spoke on the condition that he not be named. “We’re people who spend all our time reporting on other businesses, so it’s obvious to us that the executives who run the company have done a poor job. This is the kind of stuff we’re paid to notice.” (Dow Jones’ stock price closed at $73.25 at the end of the second quarter of 2000; it closed out the first quarter of this year at $35.44. During that same time, The New York Times Co.’s stock rose from $39.50 to $43.15.)
Many of the management complaints stretch back more than a decade. The failure of Telerate, a financial-information unit, was a decade-long debacle that not only depressed Dow Jones stock but also highlighted how the company had allowed Bloomberg Media to dominate the financial-information market. Recent griping makes note of that history but focuses more on the company’s seeming inability to prepare for the tech boom’s inevitable bust, and its poor adaptation to the changed economic climate. “Even at places like Business Week, the volume’s not down as much as the Journal’s (in tech and finance),” says one financial analyst who didn’t want to be quoted by name. “So people are starting to wonder, hmm, what’s going on here? I do suspect they’re missing the boat a little bit in terms of their sales strategy. They’re sticking to their [ad] rates when a lot of people are discounting, and I just suspect they’re not being as diligent in unearthing new opportunities.” (In March, the Journal replaced Paul Atkinson, its head ad salesman, with Scott Schulman.)
“In hindsight, sure, it would be hard for me to not say we should have been diversifying [our advertisers] back then,” says Rich Zannino, Dow Jones’ chief operating officer. “Next time.” But, as the paper’s managing editor, Paul Steiger, notes, the Journal is a financial publication. “Sure, we can be chided for not moving more quickly to diversify,” Steiger says. “But we are what we are.” Both men say that when the market picks up, the Journal will benefit more than its competitors. “There’s no two categories I’d rather dominate than financials and technology,” Zannino says. “Financial services is the lubricant of growth…so when the economy gets back, those firms will start advertising again.”
Meanwhile, the company’s poor performance in the market is only fueling dissatisfaction over the way staffers at the Journal feel they’re being treated. After September 11, dozens of the paper’s employees were moved out of Manhattan into offices in South Brunswick, New Jersey. Many of those employees, including members of the paper’s copy desk, are still working across the river; meanwhile, the paper has two empty floors it has been unable to rent out in its new space in the World Financial Center. Members of the paper’s top management, including House, raked in six-figure bonuses last year; in contract negotiations currently ongoing with the paper’s union, management is asking for wage freezes from everyone else. And newsroom staffers say House has ruled by fear, blowing up at subordinates and frequently screaming at people she feels are less than competent. When asked about House’s reputation, Zannino says, “What some people view as volatility and impatience I see as operating with a sense of urgency and suffering fools poorly. Those are traits of winners and successful leaders.”
Or at least survivors. “Peter survived Telerate,” one analyst who covers the company said. (His company prefers analysts not make public statements with attribution.) “He’ll survive this. And if he survives, Karen survives.” (Kann could not be reached to comment for this article.)
Unless, of course, the paper is sold. Rumors that the Washington Post Company (which also owns NEWSWEEK) is looking to buy the Journal have heated up again; earlier this year, the Post and the Dow Jones struck a deal whereby the Journal’s international editions would reprint Post news and opinion columns. Those rumors seem to be little more than wish fulfillment on the part of Journal staffers. But several analysts say they wouldn’t be shocked if the family that controls the voting shares of Dow Jones, the Bancrofts, sold the paper sometime down the road. Today, that still seems like a remote possibility. But not out of the question. Says Christa Sober, an analyst who covers the Journal for Thomas Weisel Partners LLC, “I think of all the family owned newspapers, this is one that could potentially move out of family ownership.”
