Wall Street, Meet Fleet Street

Rupert Murdoch might be good for the Journal.

Illustration by Charlie Powell. Click image to expand.

Oh. My. God. Rupert Murdoch wants to buy the Wall Street Journal. Today, his News Corp. shocked the market (subscription required) with an all-cash, $60-per-share bid for Dow Jones, the Journal’s parent company. The deal would offer a massive premium to the company’s long-suffering shareholders—and throw terror into the hearts of the company’s long-suffering journalists.

And yet the response, at least among the small portion of the journalistic community that I polled, has not been universal horror. (Look. If you’re worried that Murdoch would turn the editorial page into an organ for whacked-out right-wingers, that ship sailed a few decades ago.) “It’ll shake things up,” said one newspaper veteran I encountered in the hallway at Slate. Fortune’sAdam Lashinsky actually made the case for Murdochian ownership.

Have things really gotten so bad in newspaper land that smart people are not horrified at the prospect of Murdoch owning the Journal? In a word, yes. There have been so few positive animal spirits in the industry lately that even a shark like Murdoch is welcome

At first blush, the fit seems rather strange. In recent years, Murdoch, who started life as a newspaper baron, has been investing in digital properties like MySpace. And while the editorial pages may be perfectly in synch with Murdoch’s political views and partisan ethos, the rest of the Journal—sober, earnest, relentlessly upscale, unbiased, a paragon of journalistic objectivity and quality—seems rather un-Murdochian. It’s hard to see how it fits in with his other U.S. journalistic holdings: the down-market, moneymaking Fox News Channel, the down-market, money-losing New York Post, and the Weekly Standard. In Britain, Murdoch owns the Times, the establishment’s daily paper, as well as the Sun and the News of the World, both gutter-trolling tabloids.

And yet, you have to ask: Who else is bidding for corporate control of companies that own big newspapers? There are private-equity guys, like real-estate magnate Sam Zell, who engineered a deal to acquire the Tribune Co. that dumped all the risk on the employees and reserved virtually all the rewards for himself. There’s Brian Tierney, the former public-relations man who acquired the Philadelphia Inquirer, only to slash jobs and cut benefits. (His main innovation thus far seems to be framing a column with a bank advertisement (subscription required). Then there’s money manager Bruce Sherman, profiled nicely in Portfolio by Gabriel Sherman, who agitated for Knight-Ridder to auction itself off and has made common cause with Hassan Elmasry of Morgan Stanley to make life miserable for the Sulzbergers at the New York Times Co. Sherman’s strategy for papers seems to be for them to put themselves up for sale to people like Zell and Tierney. In other words, the only nonmanagers eager to exert control over newspaper companies are financial engineers, people with nary a journalistic bone in their body who haven’t demonstrated much commitment to journalism of any sort.

Given their outlooks, these investors are less interested in Pulitzers than in making interest payments. Which means cutting costs is an overwhelming imperative. After all, the newspaper industry is literally shrinking. Across the country, papers are shedding staff and closing bureaus, holding the line on pay and using less paper. Today, the New York Times reported that, in the most recent six months, U.S. daily circulation of newspapers monitored by the Audit Bureau of Circulations fell 2.1 percent. These trends have made life miserable for employees of newspapers, including the Wall Street Journal. Many Journal staffers have fled to Portfolio. A group of Middle East correspondents recently wrote to the company’s board complaining about management’s attitude in the current contract talks and noted that “since the last tortured contract negotiations, six of the paper’s war correspondents have left The Wall Street Journal.”Meanwhile, reporters for the news pages routinely find themselves undermined by the paper’s editorialists. Last month, James Bandler, Charles Forelle, Mark Maremont, and Steve Stecklow won the public-service Pulitzer Prize for their work on the options backdating scandal—a scandal that editorial-page columnist Holman Jenkins Jr. repeatedly belittled as so much sound and fury, signifying nothing.

Given the high-handed management, the penny-pinching, the disregard for workers’ concerns, and the right-wing editorials, one might be excused for thinking that having Murdoch own the paper wouldn’t make much of a difference.

So, where’s the upside in Murdoch control? Well, things couldn’t get much worse, could they? It is possible that the quality that the Journal’seditors work so hard—and so successfully—to sustain might have a better shot at survival if the Journal wasn’t expected to carry the weight for a public company, as it is now. Perhaps if it were buried in a conglomerate that included a movie studio, buzz-generating Internet properties, a book publisher, and TV networks, the Journal would escape some of the pressures that are currently squeezing other newspapers. What’s more, not all Murdoch’s media enterprises are suffused with Fox News standards and politics. HarperCollins’ many imprints publish plenty of quality, non-right-wing volumes. (They’re also publishing my book.)

Wishful thinking? Perhaps. But just because Murdoch makes the opening bid doesn’t mean he’ll walk away with the prize. Should Dow Jones put itself up for sale, it could kick off the mother of all auctions. For some reason, magnates love newspapers. Witness the recently concluded donnybrook between Eli Broad and Sam Zell over the Tribune Co. Private-equity funds and hedge funds are flush with cash and eager to plunge into media properties. And if you’re in business, well, there’s not much bigger a trophy than the Wall Street Journal—a paper your billionaire buddies will actually read.