War at the Wall Street Journal (10 page)

Ginsberg reported Deogun's reaction to Murdoch, who was rounding up as much information as he could about the Bancroft family. In any case, he was in the middle of his own battle to maintain control of his company. He was trying to figure out how to get John Malone, a fellow mogul and chairman of Liberty Media, to relinquish his 16 percent stake in News Corp., something Malone had started to accumulate during Murdoch's transfer of his company's domicile from Australia to the United States in 2004. Murdoch didn't want to expand his empire while Malone still had a piece of it. Dow Jones would wait.

R
ICH ZANNINO TOOK
on his CEO job Wednesday, February 1, 2006. Before he could get to running the business of Dow Jones, he had to first face the newsroom. Paul Steiger was nearing his retirement age. He would be sixty-five in 2007, and
Journal
editors had been jockeying to be his successor for years. Zannino knew enough about the paper to understand that more than any other position at the company, the managing editor of the
Wall Street Journal
was perhaps the most public position besides his own. "I know what will happen if we screw up the
Journal,
" he told the paper the day of his job announcement.

But Zannino had never banged out a story on deadline in the staid and sterile
Journal
newsroom, whose walls appeared ashy under the glaring fluorescent lights that highlighted the mild stains in the industrial blue carpet. There, the journalists, who sat in neatly divided cubicles, many littered with stacks of notebooks and newspapers, talked quietly into their telephones, whispering comforting words to sources who might unload a detail or two to make the reporter's story stand out from the rest. Zannino called himself "a devoted longtime user of the company's products," but even that statement, referring to the
Wall Street Journal
as something akin to after-shave, didn't endear him to the newsroom. The journalists mistrusted him, and he returned the feeling.

Though the Dow Jones offices had been spruced up after the devastation of September 11, the newsroom seemed threadbare. The windows had been replaced and the building thoroughly cleaned to remove the white dust and debris that covered the headquarters following the attacks, but the building, which sat in a nondescript collection of office towers in the always removed Battery Park City development, attracted little affection from its inhabitants. In the four-plus years since the World Trade Center towers fell, the journalists had trudged past the dust and paralysis of the giant hole of a construction site that was the monument to the attacks. Zannino, who took a car to work, as had Kann and House before him, was largely spared the grimy spectacle.

By the time Zannino was named CEO, the newsroom had taken on the quality of Spartan neglect. The low-ceilinged conference rooms contained nonworking speakerphones, the paint was chipping, pieces of cubicle dividers lay detached on the floor. On the executive eleventh floor, sandwiched between the three newsroom floors on levels nine, ten, and twelve, however, the walls were lined with wood paneling and the carpets were a plush beige. Sharing those civilized corridors was the editorial staff of the
Journal,
a signal perhaps that the conservative bent of those writers made them safer office companions than what executives viewed as disaffected news types.

 

The disrepair of the news floors was indicative of the slow deterioration that had begun years before, as the pretenders to Steiger's throne had tired of their place in his court and left. Years before his retirement, Steiger's deputies had begun auditioning to replace him. Their stage was often the daily morning news meeting, which took place every weekday at 10:30 a.m., when the top editors of the most influential business paper in the world gathered together in a conference room overlooking the Statue of Liberty.

Steiger, an understated and affable manager, quick to laugh and slow to anger, was facing a looming deadline. He and Peter Kann, Dow Jones's chairman and chief executive, had acknowledged years earlier they would retire together. The board had cut short Kann's CEO tenure. With Steiger's own retirement approaching, the meet
ing became a regularly choreographed exercise of preening and intellectual one-upmanship for the paper's top editors. Beneath the civility, it was a roiling cauldron of office politics.

Following the
Journal
's tradition, the editors wouldn't talk about the biggest news of the day. Unlike every other newspaper in every jurisdiction of every country in the world, the
Wall Street Journal
didn't put news on its front page. The paper relegated the biggest news stories to the inside of the paper, on page A3. Epic features and investigations for Page One were mapped out weeks if not months in advance. Because of this
Journal
peculiarity, the morning news meeting was not a frenetic debate about the most disastrous or dramatic news events, but rather a mannered recitation of the day's "sked" of stories. In a business of attention-grabbing headlines and color photos, the paper treated its front page like a quiet haven for reflective storytelling. Breaking news was important, and the paper did plenty of it, but the craft of feature writing was the center of the paper's identity. Such a tempo left plenty of time for the auditions.

Bureau chiefs, news editors, and page editors would file into the conference room or log on to the conference call. Steiger supervised this discussion. He would indulge his entourage and listen patiently to the story lineup. Mid- and lower-level editors hoped to be noticed for their clear-sighted news judgment or a lucid explanation of an arcane story. The less ambitious kept their heads down and hoped not to be put on the spot. The participants were well aware of the importance of their decisions: they were helping shape the agenda for the nation's business paper, regarded by the country's corporate executives with a combination of admiration and fear. CEOs often asked themselves, "How would this look if it appeared on the front page of the
Journal?
" The paper held sway simply by existing.

Those gunning for the top job could exhibit how much they deserved to run the most powerful business paper in the world. They tortured their underlings with probing questions. Some of the interrogations were sincere attempts to delve into an important topic; others were merely the kind of showmanship that played well when positioning oneself for advancement. Like any live show, wardrobe played a role: once, a deputy managing editor and candidate for the top job performed a 360-degree turn at Steiger's behest to show off her snazzy suit before taking her seat at the meeting.

In his later years, his detractors in the newsroom whispered, Steiger had started showing interest in the latest celebrity gossip and fashion trends. He was reading
Women's Wear Daily
magazine and paying attention to the vogue in women's shoes. His editors attributed these attractions to his third wife, Wendy Brandes, a striking young jewelry designer and fashion blogger twenty-five years his junior who looked like a modern-day Snow White with a high-fashion wardrobe and a sleek bob. As his retirement approached, Steiger joked that Brandes had threatened him: "The first day she finds me in the apartment in sweatpants after 10:00 a.m., it's not divorce; it's murder." He hadn't yet determined what he would pursue after retirement, but he didn't plan to be idle.

A year before Steiger's retirement, New York's media world was scattered with the erstwhile candidates: Larry Ingrassia, the former
Journal
money and investing editor (and brother of Paul Ingrassia, president of Dow Jones Newswires), had left to become the business editor of the
New York Times;
Steve Adler, the top investigative editor at the
Journal,
was now the editor in chief of
BusinessWeek;
Joanne Lipman, the steward of the paper's lifestyle sections, had just left for Condé Nast's new glossy monthly business magazine,
Condé Nast Portfolio.
Daniel Hertzberg, long Paul Steiger's main deputy in the newsroom, was still at the
Journal,
but he was too close in age to Steiger to be considered a successor. Of the original pool of
Journal
candidates to succeed Steiger, only Marcus Brauchli, the youngest of the group at forty-four, remained at the paper.

A journalism enthusiast, Brauchli had spent virtually his entire career at the
Journal,
minus a requisite year and a half as a copy boy at the
New York Times,
a stamp for any and all aspiring journalists of a certain generation. He was among the last of that old breed, yet despite his youthful demeanor he affected a world-weariness that made him seem a seasoned member of the club. Slim and good-looking, with a broad nose and a boyish face, he had a hairline that had receded to the point where he had adopted the closely shorn haircut of many middle-aged men hoping to look less aged. His suits, many of which he brought back from his years as a correspondent in China, were bespoke; he bought them from the cut-rate De-Luxe Tailor Shop in Hong Kong.

Brauchli spent twelve years in Asia with Dow Jones and a year and a half in Europe (with a short break for a prestigious Nieman fellowship at Harvard). As a foreign correspondent, he wrote creative, probing stories and seemed to model himself as a swashbuckling reporter much like Peter Kann.

But he occasionally grew frustrated with taking orders from New York; Brauchli wanted to try his hand at delivering the orders. In 1999, he got his chance and was offered the position of national editor at the
Journal.
Brauchli planned the move back to New York and thought of it as an experiment. As he traveled through Mongolia the summer before he returned, Brauchli promised himself that if he was good at navigating officialdom, and enjoyed it, he'd stay. But if not, he'd be right back out on the road.

He took easily to the series of managerial projects that awaited him upon his return. These propelled him up the ladder of the newsroom so quickly that he became known as "the Rocket." Brauchli just laughed at such monikers and kept moving ahead. Often, however, he would think back wistfully to his years as an Asia correspondent as he suffered (and thrived) through bureaucratic newsroom meetings. Despite these yearnings, he became known to most reporters in the
Journal
newsroom as a master manipulator of newsroom politics. His roles expanded, and he began to take on more business-oriented projects. In 2005, he helped redesign the paper's small and struggling European and Asian editions, turning them into smaller tabloid formats, which sold better on newsstands in Europe and saved the company money in production costs. By the end of that year, he had started to work on a redesign of the paper's U.S. edition.

When Zannino was appointed CEO, Brauchli saw the move as favorable to his chances at the managing editor slot; he and Zannino had gotten to know each other through Dow Jones's Senior Leadership Team events, meetings for the company's executives to brainstorm about strategy. Brauchli sensed that Zannino liked him.

The redesign of the U.S. paper was gaining momentum just as Zannino took on the CEO role. To save money, Kann and Zannino and House had agreed on one thing: to shrink the size of the
Journal
by three inches to save on newsprint and production costs. The old size of the paper, an expansive fifteen-inch width, made it unique, but such grandiosity was no longer possible in a world of dramatic budget constraints. The paper would shrink to become a foot wide.

Now, the project was Crovitz and Brauchli's to implement. The
Journal,
like every other newspaper in the country, was suffering from an identity crisis. Not only was advertising down, but the paper was competing with online news sources and twenty-four-hour cable news. The immediate reason for the redesign was the adoption of a narrower-size paper that would allow the
Journal
to be printed on presses across the country that weren't owned by Dow Jones. The move would save $18 million a year. Crovitz refused to blame the change on the tough times. Instead, in an Orwellian twist, he would take this literal shrinking of the paper and sell it to readers as a sign of a strong future.

Crovitz decided he would call the new iteration of the newspaper "
Journal
3.0." He arrived at the name—never popular in the
Journal
's newsroom or executive floor—by taking particular note of the
Journal
's lead front-page story the day after Japan attacked Pearl Harbor: "War with Japan Means Industrial Revolution in the United States" read the headline. The story outlined the implications of the attack on the country's economy, industry, and financial markets. For Crovitz, it also marked the end of the first phase of the
Journal—"Journal
1.0," the time between the paper's founding in 1889 and December 5, 1941. During that period, the
Journal
reported the news like any other outlet. After that headline and under Bernard Kilgore, who became the paper's managing editor the year of the Pearl Harbor attack, the
Journal
started adding more analysis to its stories and expanded its coverage beyond business and finance. Crovitz defined "
Journal
2.0" as starting on December 8, 1941. He planned for it to end on December 31, 2006, when he would usher in the paper's third phase. To compete against the immediacy of the Web, Crovitz wanted the paper, instead of running stories that rehashed what people had learned the day before on their BlackBerrys, to become more analytical.
Journal
reporters would break news on the Web site and then examine it in the next day's paper.

Though Brauchli appeared largely unchallenged inside the
Journal
newsroom, another candidate from another Dow Jones division, Paul Ingrassia, was a leading contender for the managing editor post. Ingrassia, who had served as the
Journal
's Detroit bureau chief in the 1990s, had won a Pulitzer Prize in 1993 for his coverage of the automobile industry. For the past ten years, however, since 1996, he had served as president of the company's storied "ticker," which was one of Dow Jones's largest and most profitable divisions, and one that
Journal
reporters had always dismissed as a journalistic stepchild. Newswires wrote bare-bones stories for investors. They had no pretensions to craft a gripping narrative; their job was to report on the corporate news of the moment, updating the investors who subscribed to their service. Newswires reporters were judged on how many seconds their stories appeared before competitors' at rival newswire services Reuters and Bloomberg. During Ingrassia's tenure as the head of Newswires, he had maintained its profitability and built up its journalistic credibility, though the division still lagged in reputation behind Reuters and the ever dominant Bloomberg. Still, Ingrassia had done good work. The ticker hadn't won a single award for its journalism in the 115 years prior to Ingrassia's arrival but then accumulated thirty during his time in the job. The position gave him what Crovitz called "management maturity."