War at the Wall Street Journal Read Online Free Page A

editor of the
Times
or the
Sunday Times.
" Toward the end of the letter, he penned a sentence that played to Sulzberger's vanity—as a scrupulous owner who never interfered in coverage—but that Murdoch meant as a dig. "On a broader basis," he continued, "I promise you that I will treat you as an example in my relationship with editors." It was a fitting ambiguity, similar to Sulzberger's "don't feel it's faintly anti-Murdoch." What type of example would Sulzberger be when Murdoch spoke to his editors?
    Murdoch couldn't resist a final dig. The last line of the letter stood alone in simple type.
    "Let the battle begin!"

1. The Fix
    D OW JONES SEEMED destined for Rupert Murdoch long before the official dealing had begun. For decades, Murdoch had coveted the
Wall Street Journal.
His children couldn't remember a time when he wasn't talking about it. His most trusted colleagues called it a "preoccupation" for him (even more than the
Financial Times,
which he had tried and failed to buy, or the
New York Times,
which he also eyed). He was open about his admiration, and among Wall Street's bankers, brokering a deal between the Bancroft family and a deep-pocketed media mogul such as Murdoch was a tantalizing opportunity.
    So in the summer of 2002 when James Bainbridge Lee Jr. stood in his dark-wood-paneled office on the executive eighth floor of JPMorgan Chase & Company's midtown Manhattan headquarters, he prepared carefully for his upcoming call. He was contemplating how to break into one of the most difficult-to-crack media families in the country, the Bancrofts of Dow Jones & Company and the
Journal.
    As Jimmy checked the market movements and news on the five computer screens on his desk, his image stared back at him from the framed
Forbes
cover on his bookshelf. Under the headline "The New Power on Wall Street," the photo displayed a slightly younger version of the Wall Street banker in his cufflinks and suspenders, his graying hair slicked back and curling slightly below the ears. The piece invited readers to "Meet the New Michael Milken." Jimmy, as he was known on Wall Street, could have served as the model for "investment banker" if the Museum of Natural History mounted a diorama of the species, but his thoughts that day were not on his appearance.
    Jimmy had made his reputation more than a decade earlier as a young banker making big loans to clients who wanted to make even bigger deals. His Rolodex was the source of his power, and he used it. He was sometimes derided as a glorified matchmaker. Every day, he started a new page on his yellow legal pad, jotting down in his all-caps scrawl a list of names to contact. By evening, after his usual frenetic day of jokes and ingratiating storytelling, the names were crossed off with his thin royal blue marker.
    That midsummer day in 2002, he had already scribbled through one page and had moved on to the next when he dialed Richard F. Zannino's number. Zannino had just been named the chief operating officer at Dow Jones & Company, an elevation that put him a single step away from the spot where Jimmy wanted him for the match he had in mind. Dow Jones, while a storied media firm, seemed increasingly small and outpaced alongside entertainment conglomerates such as Viacom Inc., Time Warner Inc., and News Corp. Even pure news outlets such as Bloomberg LP and Reuters PLC now dwarfed the parent of the
Wall Street Journal,
which had been struggling since the implosion of the Internet bubble in the spring of 2000 had dried up much technology and financial advertising. The
Journal
was in the process of losing more than $300 million in advertising revenue, and the paper would spend the next three years losing money. The company's stock had peaked near $78 a share in the summer of 2000. Currently it was trading in the low $40s.
    That Zannino would pick up the phone at all to chat with a banker like Jimmy represented a change at Dow Jones. Zannino's boss, Dow Jones CEO Peter Kann, would