Massive 'NYT' Story Profiles Murdoch and His Maneuvers

This Time His China Ties
'NYT' Continues Probe of Murdoch -- This Time His China Ties -- And News Corp. Hits Back
By E&P Staff
Published: June 25, 2007

NEW YORK After a massive probe of several aspects of mogul Rupert Murdoch's career on Monday, The New York Times returns Tuesday with a lengthy look at his connections with and views on China.

As with the first article, Murdoch refused to undergo an interview, but his News Corp. issues the following statement: "News Corp. has consistently cooperated with The New York Times in its coverage of the company. However, the agenda for this unprecedented series is so blatantly designed to further the Times's commercial self- interests ?- by undermining a direct competitor poised to become an even more formidable competitor ?- that it would be reckless of us to participate in their malicious assault. Ironically, The Times, by using its news pages to advance its own corporate business agenda, is doing the precise thing they accuse us of doing without any evidence."

The article by Joseph Kahn opens as follows. It runs in full at www.nytimes.com

Many big companies have sought to break into the Chinese market over the past two decades, but few of them have been as ardent and unrelenting as Rupert Murdoch's News Corporation.

Mr. Murdoch has flattered Communist Party leaders and done business with their children. His Fox News network helped China's leading state broadcaster develop a news Web site. He joined hands with the Communist Youth League, a power base in the ruling party, in a risky television venture, his China managers and advisers say.

Mr. Murdoch's third wife, Wendi, is a mainland Chinese who once worked for his Hong Kong-based satellite broadcaster, Star TV. Her role in managing investments and honing elite connections in China has underscored uncertainties within the Murdoch family about how the family-controlled News Corporation will be run after Mr. Murdoch, 76, retires or dies.

Regulatory barriers and management missteps have thwarted Mr. Murdoch's hopes of big profits in China. He has said his local business hit a "brick wall" after a bid to corral prime-time broadcasting rights fell apart in 2005, costing him tens of millions of dollars.

But as he seeks to buy Dow Jones, the parent company of The Wall Street Journal, his track record in China has attracted attention less because of profits and losses than for what it shows about his management style.

Mr. Murdoch cooperates closely with China's censors and state broadcasters, several people who worked for him in China say. He cultivates political ties that he hopes will insulate his business ventures from regulatory interference, these people say.

In speeches and interviews, Mr. Murdoch often supports the policies of Chinese leaders and attacks their critics. A group of China-based reporters for The Journal accused him in a letter to Dow Jones shareholders of "sacrificing journalistic integrity to satisfy personal and political aims," a charge the News Corporation denies.

His courtship has made him the Chinese leadership's favorite foreign media baron.

Bill Moyers Rips Murdoch On PBS Show last night
Bill Moyers Rips Murdoch On PBS Show (last) night
By Joe Strupp
E & P
Published: June 29, 2007

(Last) night's edition of Bill Moyers' Journal on PBS contains a stinging criticism of Rupert Murdoch by the show's host, who uses the pending sale of Dow Jones & Co. to Murdoch as an excuse to point out what he deems are the News Corp. chairman's worst traits.

"If Rupert Murdoch were the Angel Gabriel, you still wouldn't want him owning the sun, the moon and the stars," Moyers starts his video essay. "That's too much prime real estate for even the pure in heart.

"But Rupert Murdoch is no saint, he is to propriety what the Marquis de Sade was to chastity. When it comes to money and power, he is carnivorous, all appetite, no taste. He'll eat anything in his path," Moyers adds. "Politicians become little clay pigeons to be picked off with flattering headlines, generous air time, a book contract, or the old-fashioned blackjack that never misses, campaign cash.

"He hires lobbyists the way Imelda Marcos bought shoes. And stacks them in is cavernous closet along with his conscience. This is the man, you remember, who famously kowtowed to the communist overlords of China, oppressors of their own people, to protect his investments there."

He cites Murdoch's links to numerous politicians, including Bill and Hillary Clinton, while touching on his company's history of paying little or no federal income taxes in recent years.

But Moyers does not limit his critique to Murdoch, taking to task the ongoing trend of newspaper companies and owners either selling out to private owners or cutting staff, declaring "Murdoch is just the predator of the hour."

The nearly four-minute essay, slated to be broadcast on tonight's edition of PBS' Bill Moyers' Journal, can be seen here .
http://www.pbs.org/moyers/journal/06292007/watch4.html

So Who Is On That New 'WSJ' Board To 'Buffer' Murdoch?
Rupert Murdoch has never kept his promises to the newspapers he bought. The committee members' $100,000 annual salary will assure they follow Murdoch's orders. ---BBB

So Who Is On That New 'WSJ' Board To 'Buffer' Murdoch?
By E&P Staff
Published: August 01, 2007 1:45 PM ET

It was an idea, then a proposal and a negotiation, and now it's a reality: A "special committee" to serve as a "buffer" between the new owner of the Wall Street Journal, Rupert Murdoch, and the paper's "independent" newsroom operation.

The two sides agreed to it officially yesterday. It will also have a "say" in the hiring and firing of the paper's two top editors.

The Journal posted the full text of the agreement, in a SEC filing, on its site this afternoon. It's at: http://online.wsj.com.

Board members, the agreement states, will be paid $100,000 per year.

According to The Washington Post today, the initial members of the editorial board will be: Lou Boccardi, former head of the Associated Press and a director of the Gannett Co.; columnist Thomas Bray; former Republican House member Jennifer Dunn; former Tribune Co. president Jack Fuller; and Nicholas Negroponte, founder of MIT's Media Lab.

Boccardi confirmed that he was on the panel in an interview with E&P on Wednesday.

Here are two key sections of the SEC filing as published by the Journal.

SPECIAL COMMITTEE

1.1 Establishment.

(a) The Company hereby establishes a stand-alone special committee (the "Special Committee") to oversee and enforce compliance by the Company and Dow Jones and their Affiliates with the terms of this Agreement and to perform the obligation and undertake its responsibilities and rights hereunder. The Special Committee shall have perpetual existence. For the avoidance of doubt, the Special Committee is a special committee of the Company and is not a committee of the Board of Directors of the Company or Dow Jones.

1.2 Composition.

(a) The Special Committee shall consist of five (5) members ("Members") who are distinguished community or journalistic leaders and who are independent of the Company, Dow Jones, the Murdoch family, the Bancroft family and their respective Affiliates (as defined by Rule 12b-2 under the Securities Exchange Act of 1934, as amended). As used in this Agreement, the term "independent" shall refer to persons who, in the sole judgment of the Special Committee, are able to consider and evaluate objectively any issue that comes before the Special Committee and whose judgment is not impaired by any interest in or relationship with the Company, Dow Jones, the Murdoch family, the Bancroft family or their respective Affiliates. Employees, directors and consultants of the Company, Dow Jones or their respective Affiliates shall be deemed not to be independent. Any Member shall promptly report to all of the other Members any change in his or her circumstances which may reasonably be expected to bear on the determination of his or her status as independent (as defined herein).
***

(A) The authority of each of the Editors will include:

(1) the power to hire and remove subordinates (including any material changes in the terms and conditions of employment of any such subordinate that could give rise to constructive termination, such as a material reduction in compensation, relocation of principal place of employment, material change in duties, responsibilities or position and the like) within their respective publications and operations, in each case consistent with departmental budgets set by the Company or Dow Jones management following discussion with the relevant Editor; the decisions of the Company or Dow Jones on departmental budgets will be final, and

(2) control over spending and allocation of resources within departmental budgets set by the Company or Dow Jones management following discussion with the relevant Editor; the decisions of the Company or Dow Jones on departmental budgets will be final,

(B) in the case of the managing editor of The Wall Street Journal, and, so long as he or she is an Editor, the managing editor of Dow Jones Newswires (or any successor of the foregoing), authority over:

(1) all news decisions with respect to The Wall Street Journal Publications and Dow Jones Newswires Publications, as applicable (including decisions on subjects of news coverage, length, placement and accompanying art or other media), and

(2) use of staff of The Wall Street Journal Publications and Dow Jones Newswires Publications, as applicable, by advertisers or other businesses, publications or services;

(C) the managing editor of The Wall Street Journal shall continue to report to the publisher of The Wall Street Journal,

(D) the managing editor of The Wall Street Journal shall be consulted prior to the use of The Wall Street Journal or Dow Jones brand names by the Company, its Affiliates or any other party to provide the managing editor the opportunity to raise any objections to and suggestions concerning the proposed use of the brand; provided that the decisions of the Company on branding matters will be final;

New Editorial Review Committee Looks Like 98-Pound Weakling
New 'WSJ' Editorial Review Committee Looks Like A 98-Pound Weakling
By Mark Fitzgerald, E&P's editor-at-large
August 01, 2007

Am I missing something? That's the reaction I had as I pored over the dense, lawyerly text of the Dow Jones editorial agreement with News Corp. that is supposed to protect the integrity and independence of the newsrooms and opinion pages of The Wall Street Journal and its siblings from Rupert Murdoch's real or imagined design to bend the flagship to his business or political interests.

I was struck by what I didn't see in the agreement.

There's a reference right up front to the Special Committee's powers to "enforce" the agreement, yet the more I read, the more it appears that the enforcement amounts to the power to write a report and publish it in the Journal.

Maybe I missed it, but I didn't see any mechanism that would permit a lowly reporter to approach this august committee with a complaint -- let alone any guarantee that the journalist would not suffer any reprisals for being a whistle blower.

Now, the Journal has an editorial union, and maybe the bargaining agreement's disciplinary system is considered protection enough. But how about those many journalists with management-sounding titles who are inevitably cherry-picked out of every labor contract? Where's their shield?

Turns out I'm not the only one who considers the agreement a rather thin reed to carry the weight of a century-old institution.

"It seems like a pretty flimsy structure to me," Rick Edmonds, The Poynter Institute's media business analyst, told me Wednesday.

Edmonds noticed two things about the document right away. First, it would be kicked back to the writer by any newspaper copy editor in the land. But more important, it never really gets around to making any kind of mission statement.

Indeed, in true corporate counsel fashion, it is far more concerned with such details as the notice the committee must give a member it wants to remove involuntarily. (It's partly covered in section 1.2(f)(ii): "(T)he Member shall have been given at least ninety (90) days after the delivery of such notice to the Member to discontinue, and during such time shall have not discontinued, the acts or failures to act specified in the notice.")

As for the powers of the committee, well, Edmonds says he's as mystified as I am: "It sort of starts talking about a couple of, quote, 'powers,' but it really doesn't put that in a real context."

And while it refers at one point to the committee's binding decisions in matters brought up by the managing editor, who is the Journal's top newsroom editor, or the editorial page editor, Edmonds points out that it flunks the real-world test.

"I have sort of a hard time envisioning this arrangement functioning," he said. Any top editor with issues with News Corp. serious enough to warrant that kind of decision would be unlikely to want to remain a News Corp. employee, he suggests. Edmonds writes about the agreement -- and makes predictions about Murdoch ownership -- in his Poynter blog today.

The five people reportedly named to the initial committee -- Lou Boccardi, former head of the Associated Press and a director of the Gannett Co.; columnist Thomas Bray; former Republican House member Jennifer Dunn; former Tribune Co. president Jack Fuller; and Nicholas Negroponte, founder of MIT's Media Lab -- are so clearly among the best in the business and beyond reproach that, Edmonds says, they must know something we don't.

Still, it's astonishing that weeks of agonizing among the Bancrofts and the Dow Jones board, and negotiations with News Corp., could muster so little power in a document so big.

By my Microsoft Word count, the agreement runs 6,958 words. And yet, Yahweh, according to the King James version, needed just 383 words for the Ten Commandments.

But then, I suppose, Yahweh was trying to guide Moses and humanity away from Lucifer and mankind's fallen nature.

Dow Jones was dealing with Rupert Murdoch.

'WSJ' Stands By Negroponte Despite Murdoch Link
UPDATE: 'WSJ' Stands By Negroponte Despite Murdoch Link
By E&P Staff
Published: August 02, 2007

Dow Jones may not have known that one of the people assigned to help monitor the Wall Street Journal's editorial independance runs a charity that received $2.5 million in funding from Rupert Murdoch's global media conglomerate. Reuters reported this first on Thursday and it was confirmed by an article in the Journal on Friday.

As part of the deal to sell Dow Jones to Murdoch, Massachusetts Institute of Technology Professor Nicholas Negroponte was selected to sit on the five-member special committee that will oversee the editorial independence of Dow Jones's news operations.

"We have confidence that Nicholas Negroponte can be an effective and valuable member of the Special Committee on editorial independence,' said Journal Managing Editor Marcus Brauchli and Editorial Page Editor Paul Gigot in a statement. "We did not envision that members of the committee, News Corp. and Dow Jones would have no associations among or with each other, only that they would be people of integrity who are committed to ensuring our editorial independence."

In an interview with Reuters conducted over e-mail in May, Negroponte described Murdoch as a personal friend and a key backer of the One Laptop per Child (OLPC) foundation that makes inexpensive laptop computers for poor children. Negroponte is former chairman of the MIT Media Lab and a founder of Wired magazine. He is the brother of John Negroponte, the Bush administration's former intelligence chief.

It was not immediately clear if the Bancroft family, which approved the sale to Murdoch, was aware of the payment.

It sounds like a conflict of interest, Louis Ureneck, chairman of the journalism department at Boston University, told Reuters. "Is a person truly independent if a decision he makes puts at risk a significant grant to his foundation? It strikes me that there is a conflict," said Ureneck.

The New York Times reported today that sources that revealed that four members of the new board were selected by Dow Jones "while Mr. Negroponte was proposed by the News Corporation."

The Wall Street Journal reports on Friday: "A Dow Jones spokesman referred to language in the merger document that defined independent people as those 'who, in the sole judgment of the Special Committee, are able to consider and evaluate objectively any issue that comes before the Special Committee and whose judgment is not impaired by any interest in or relationship with the company [News Corp.], Dow Jones, the Murdoch family, the Bancroft family or their respective affiliates. Employees, directors and consultants of the company, Dow Jones or their respective affiliates shall be deemed not to be independent.'

"A News Corp. spokesman said, 'Dow Jones thinks [Mr. Negroponte] is independent, we think he is independent.'

"It isn't clear whether Dow Jones was aware of News Corp.'s ties to Mr. Negroponte's group, although it hasn't been a secret and was reported by the Journal in November 2005."

Another member of the board, Jennifer Dunn, is a former conservative Republican member of Congress with no apparent editorial background. Another conservative on the panel, Thomas Bray, has served as a columnist.