Fox net, Journal can cooperate, Murdoch says
EmptyNEW YORK -- In his first public strategy outline since reaching the agreement to acquire Dow Jones & Co., News Corp. chairman and CEO Rupert Murdoch on Wednesday signaled his goal of become a major provider of global financial news through eventual synergies between the Wall Street Journal and the soon-to-be-launched Fox Business Network.
The media mogul also pointed to $50 million in cost savings at the acquired company and the sell-off of Dow Jones regional newspapers.
Murdoch said that News Corp. is not in talks to buy out the exclusive contract that NBC Universal-owned CNBC has with Dow Jones and its flagship Journal. The deal runs through 2012, and CNBC executives have indicated that they expect the arrangement to be honored no matter who owns the Journal.
Murdoch, though, has expectations of his own, which no doubt includes that his newly acquired Journal and its more than 700 financial reporters and editors team up with the Fox Business Network that is set to launch in October in direct competition with CNBC.
"The CNBC contract is an obstacle, but we still think there are opportunities for the business network and the Journal" to cooperate outside of business news, Murdoch said during an earnings conference call that was dominated by questions about his broader Dow Jones vision.
Overall, Murdoch said the $5 billion Dow Jones acquisition has the potential to be "transformative" for his conglomerate and should make News Corp. a global provider of news in addition to entertainment.
The deal, sealed last week, "will provide an immediate and important lift to the whole company" and enable News Corp. to become a key player in the market for the "burgeoning demand for global financial information," Murdoch said.
Murdoch said that having Dow Jones and the Journal will immediately boost the credibility of FBN, which will launch Oct. 15 with a minimum of 31.5 million subscribers and in markets including the financial capital of New York. He added the acquisition also could help expand the channel's carriage deals.
The News Corp. CEO predicted that with Dow Jones' help, FBN will surpass CNBC's valuation "in short order" in the same way that Fox News Channel trampled eventually CNN and MSNBC. He cited analysts' current valuations of CNBC at more than $4 billion.
News Corp. president and COO Peter Chernin estimated during the call that his conglomerate's total FBN investment would be $150 million-$200 million and that the channel would break even within "a couple" of years.
FBN shares a headquarters and some staff with the high-flying Fox News Channel.
"Early plans, led by (FNC chief) Roger (Ailes) and his team, I think are really exciting," Chernin said. He added that he is confident that his team will make FBN a "terrific differentiated product" -- with or without Dow Jones.
"We'll look at anything else that comes from Dow Jones as gravy," he said.
Murdoch signaled that his team will unveil more detailed plans for Dow Jones and FBN down the line, but he did say that one big decision his management team is focused on right now is whether to make access to the online Journal free.
Such a move would hurt the paper's financials short-term, but "long-term (it) may be a wonderful thing to do," Murdoch said.
Overall, while he declined to provide specifics, the News Corp. boss said digital growth at the Journal and other parts of Dow Jones, including Barron's, Marketwatch.com and Factiva, are key priorities.
He also repeated comments that he wants the Journal to more aggressively compete with the New York Times and other national dailies as well as the London-based Financial Times and that he wants to expand coverage with more national, international and nonbusiness news. And he's aiming to boost the Journal's sweep in Asia and Europe.
Murdoch also shot down suggestions that News Corp. could cut advertising or subscription prices to increase the Journal's reach and added that the paper likely would go into immediate hiring mode to expand its offerings.