Saturday, February 13, 2010

What happens if you don't Stop Murdoch?

Original Link:

Just ask anyone who used to have something to do with the 'Wall Street Journal' before Murdoch got his claws into it.

GQ did, and the results are edifying. Some interesting quotes:

Hillary Stout
Former editor, WSJ
The reaction to the offer was absolute, indescribable shock. To me, Murdoch was the tabloid king—topless women and screeching headlines. He was sort of the anti-Wall Street Journal.

Bruce Page
Author, The Murdoch Archipelago
The only investigations that take place in the Murdoch papers are carefully controlled checkbook journalism jobs on minor people and gossip operations. They never take on anything where they don't know how it's going to end, because the people whose toes get trodden on may well be the guys he's doing deals with.

Theo Francis
Former reporter, WSJ
I think the Journal might have been able to stay independent, if that had truly been the focus of the owners and the managers. But it wasn't. The focus of the owners and the managers was the dividend. With Rich Zannino's ascendancy to CEO, I think there's no question that the company was not about journalism any more—it was about making money.

Anonymous #2
Reporter, WSJ
Look, the person who sold us down the river was Rich Zannino. He wanted to do this deal so damn bad. Zannino's been like a Cheshire cat about this deal. He went and got nice and tan after it was all done.

Anonymous #1: Rich Zannino was not well liked in the newsroom. He was actually a figure of some derision. He was not a newspaper person. He was this perpetually tanned—to the point of being nearly orange—guy in perfectly tailored suits in a newsroom that is not known for perfectly tailored suits. What newsroom is? He had a tendency to have one too many buttons undone on his shirt and spoke in corporate-ese. This is of course a newsroom full of business reporters. We pride ourselves on our ability to see through corporate bullshit, and he spoke in nothing but corporate bullshit. Zannino's money came up quite a bit, the amount that he was potentially going to make in a deal. There was a sense that Murdoch had sat down with Zannino; Zannino sees dollar signs and jumps at the deal. He didn't have longstanding ties to Dow Jones or loyalty to the Bancrofts or to the Journal. I don't think anybody ever thought he would stick around after a deal.

Greenspan: Zannino took a couple of breakfast meetings with Murdoch without telling the family, and they were furious at him. So he was sort of a marked man: If the transaction did not happen, he could lose everything. And he had a trigger point in his deal with Dow Jones that if a sale happened, all his options vested, and it was a $20 million payoff. My view is that the board should have pushed back and said, "You forced us into a process, and now we're going to do an official process to sell the company." Murdoch somehow got Zannino to convince the Bancrofts, "Let's not prolong this." And then the media did its thing, which was, "If the Bancrofts don't sell, the stock is never going to recover."

Anonymous #3
Source familiar with the transaction
A big deal was made at the time, though it wasn't written about very much, of the fact that Dow Jones used Goldman Sachs for the deal, and Goldman Sachs had historically been NewsCorp's house bank. Everyone in the deal world talked about it. Everyone. Literally, people, their jaws dropped: "How could you use NewsCorp's banker to advise Dow Jones?" Zannino in particular came in for a lot of criticism: He handpicked Goldman, and he knew that Goldman would make sure the Dow Jones board would approve the deal.

Greenspan: When I met with this special committee of the Board, just Zannino and two or three other guys, they acted like it was a pain in the ass that they had to be in that room. They didn't want me to walk through any of the material, the metrics, that I had put together. There's this one guy, Harvey Golub, who used to be chairman and CEO of Campbell Soup, and every time I tried to talk about why I thought the stock value was greater, he goes, "I don't want to hear from you. I don't want to hear any more about that." I was shocked. They had gotten their bankers all ready to say NewsCorp's offer was fair, so they had checked that box. They weren't looking for other possibilities. Afterward Zannino takes my card and goes, "You've got some really good ideas. I'll follow up with you." Of course I never heard from him.

Anonymous #3: The view on the street was that the fix was in. And that was proved out by how this thing ended, without [Murdoch] increasing the price by one penny. I can't think of a deal where the first bid ended up being the final bid. I just can't think of it in my career, and I've been on Wall Street for thirty years. When management basically rigs a sale so that it's assured of happening, by using a NewsCorp banker, that's pretty outrageous by any standard. I think they thought they could get away with it, that no one would notice.

Calderone: Zannino walked with over $20 million for 18 months' to two years' work. He was supposed to get the newspaper on better financial footing and he walked away with $20 million.

Wow! Who is this Zannino bloke, and what does he do these days? Well, he was appointed to the board of trustees of "Pace University" apparently:

Alongside Zannino, 27 members sit on the BOT. The Chair of the Board is Aniello A. Bianco, alumnus of 1961, who is the vice president of Hildebrandt International. Other alums include Ivan G. Seidenberg of 1981, who is now the chairman and CEO of Verizon Communications and Edward F. Murphy, alumnus of 1974, who is now the executive vice president of the Federal Reserve Bank of New York. According to Christopher Cory, executive director of public information, "The experience in the job market that these members of the Board have is great for the University."
What an interesting chap, apparently he is also the managing director of some mob called CCMP (no doubt a shining light of corporate rectitude and propriety!).

Anyway, these days all you need to know is: Murdoch, Zannino, Goldman Sachs = Poooooooo!!!! It Stinks!

Oh, and by the way, has anyone pondered what it might mean that Rupert Murdoch now actually owns the Dow Jones index?

No comments:

Post a Comment