In his first public address since his bid for Dow Jones was approved, Rupert Murdoch on Wednesday outlined a vision for the Wall Street Journal as a paper with the potential to expand well beyond its traditional mission of business news.
Mogul said that he wanted the Journal to become a stronger competitor to the New York Times through “more coverage of national and international nonbusiness news.”
He also noted that the paper was “a brand that could be much further exploited.” Specifics for how that would happen, however, were scant.
Among the few specific ideas he floated was making the Journal’s successful subscription website into a free service. He noted it would be “an expensive thing to do in the short term, but in the long term, it may be a wonderful thing to do.”
Speaking to reporters and analysts as part of News Corp.’s fourth-quarter earnings report, Murdoch also took jabs at critics of his Dow Jones bid.
News Corp.’s numbers for the quarter revealed that film operating income at Fox dropped roughly in half, down to $106 million this year from $200 million last. But a strong frame for cable sent conglom’s net income up 4% to $890 million on revenues of $7.37 billion, up 9%.
More interesting were Murdoch’s comments, which made it clear that the sometimes-bitter three-month pursuit of Dow Jones took a personal toll on the titan. Murdoch noted that the company was “enduring criticism normally leveled at some genocidal tyrant. If I didn’t think it was such a perfect fit,” he said, “I would have walked away.”
Murdoch was very careful to avoid details about changes to Dow Jones — a cause for speculation and concern since his bid surfaced. “As we get deeper into the business, we’ll have much more to say about how we plan to integrate and grow it,” he said.
The $5 billion acquisition still requires the approval of Dow Jones and News Corp. shareholders.
Mogul breezily dismissed the question of how different the financial-news biz is from News Corp.’s core entertainment businesses, saying that the acquisition builds up the information side to “complement” the entertainment side.
He noted that Dow Jones will provide “an immediate and important lift” to the conglom’s digital biz but declined to elaborate on how it would fit with the company’s other new-media platforms, such as MySpace and the still-gestating Web video venture with NBC Universal.
Murdoch did say he believed that the deal would add credibility and even potentially accelerate carriage deals for the Fox Business Channel.
He also vowed not to cut ad rates or prices to increase circulation or advertisers at the Journal; at the New York Post he famously slashed the price to increase circ.
Move to beef up Journal’s nonbusiness reporting comes at an odd time for Murdoch, who is launching the Fox Business Channel in October.
But Murdoch played down the role the paper could have at the net, acknowledging that a long-term deal between CNBC and Dow Jones was an “obstacle” and saying that, since the CNBC deal covered only business news, Dow Jones could be used to feed nonbusiness news to other Fox channels. (See related story.)
As for News Corp.’s financials, revenue at the studio fell from $1.79 billion to $1.45 billion to go along with the profit dip for the quarter.
Conglom said that much of last year’s profits were driven by new entries in the “Ice Age” and “X-Men” franchises and that the studio had no comparable pics in the fourth quarter this year.
Much of the $106 million in film operating income came from homevid releases of pics such as “Night at the Museum.” Theatrical releases were modest in the quarter as the studio waited until summer to release its tentpoles.
In explaining the profit falloff, execs also cited release costs from movies like “The Simpsons” and “Live Free or Die Hard,” which will show the bulk of their profits in the next quarter, which began July 1.
For the full year, profits rose to $3.43 billion from $2.31 billion the previous year on revenue of $28.67 billion, up 13%.
Cable networks, led by Fox News, were among the biggest drivers in the quarter: Operating income jumped nearly 50% to $284 million in the category, and revenue was up 14% to $1.1 billion.
Like the studio, the broadcast side showed some weakness, with profits falling 4% to $385 million. News Corp. prexy-chief operating officer Peter Chernin acknowledged that the company’s embattled MyNetwork TV venture was “a disappointment.”
News Corp. touted the frame as the most profitable quarter for Fox Interactive Media, driven by MySpace, which showed a profit for the year.
Company also predicted that MySpace will yield more than $800 million in the coming year, and the Fox Interactive Media unit, which houses MySpace, will generate $1 billion in total revenue. Murdoch reveled in the MySpace acquisition, which celebrates its two-year anniversary this month.
“It wasn’t so long ago when many said we were embarking on a fool’s errand,” he said.
And execs emphasized the strategy of reducing ownership in television stations domestically while increasing it abroad, particularly in nascent markets like Eastern Europe.