War at the Wall Street Journal (36 page)

The
Journal
's modest circulation increase had been cemented before the deal had even closed. During the destabilizing interregnum in the moments of what Brauchli had called "preemptive capitulation" (a term he did not apply to himself but that others did), Dow Jones's marketing department had arranged an additional $17 million in spending to boost the paper's circulation in the period following the close of the deal, a tidy sum that would guarantee the perceived success of the upcoming changes to the "new"
Wall Street Journal.
By the time Leslie Hinton, Murdoch's hand-selected CEO of Dow Jones, took the helm of the company, the campaign had been scaled back, but a portion of the money had already been spent on hefty direct-mail campaigns and granting subscriptions to frequent fliers. Of course, Murdoch's tactics weren't unique to him, and there wasn't a paper in the country that hadn't bulked up its circulation. But a successful businessman knew the importance of the impression of success, and Murdoch wouldn't risk losing a game of perception in this newspaper battle.

I
N ABOUT A MONTH
, Thomson arrived at the conclusion that he was, indeed, the best man to take over the
Journal
newsroom. He moved into Brauchli's office (finally attaining a prominent ninth-floor spot) days after the short-lived managing editor vacated it. Even though it was obvious to anyone who knew Murdoch that Thomson would be the paper's next managing editor, speculation about other candidates had persisted inside the
Journal
newsroom in the weeks preceding the announcement. The speculation illustrated a newsroom's capacity for self-deception in the face of the uncomfortable reality that this Murdoch takeover was proceeding exactly like every other. Murdoch was not going to make an exception for the
Wall Street Journal.

Journalists are, typically, a self-loathing bunch. Driven as they are to see the flaws in other people and institutions, their eyes often train on themselves, uncovering the weaknesses in their own and colleagues' stories and reporting styles. Self-recrimination ran rampant at the
Journal
in the weeks and months after Brauchli's resignation. The
Wall Street Journal,
despite being one of the most powerful papers in the world, retained the defensive status of a runner-up to the
New York Times.
Though it sold double the number of papers the
Times
did, and was the newspaper of choice in the heartland, it was less important in the corridors of New York and Washington. Murdoch obsessed about replacing the Grey Lady with his paper. Rallying his band of pirates had always been one of Murdoch's easiest tasks. News Corp. executives and editors often used the phrase "one of us," as if they were members of the mob. Thomson wasn't an old-school Murdoch hand like the
New York Post
's Col Allan or Dow Jones's Leslie Hinton, but he was able and willing to wage guerrilla warfare against his rivals. While he took swipes at the
Times
at every opportunity, through his alliterative digs—he once labeled the uptown rival "sanctimony central" and on the same occasion said the paper was full of "preening, posturing, and pretentiousness"—the rallying didn't give the troops back at 200 Liberty a surge of solidarity with their new boss. For Thomson was still waging his own war inside the paper, against his own staff, to shake them out of what he would happily call the complacency of editors who stayed too long in their posts, preening for one another and writing only for prize packages. "I mean no disrespect to Paul Steiger," he would say, as he launched into one of his screeds, "but I think it's good for editors to not stay in their jobs too long."

Dow Jones plunged into a period of high anxiety. The staff waited for the influx of Aussies to start and for the old
Journal
heads to roll. Outside the walls of the
Journal,
Thomson's style of boosterish support for the paper began, and he lashed out at the
New York Times
repeatedly in a Fleet Street-style attack that cheered Murdoch and drew confused head shaking from those inside the
Journal.
Perhaps they had been trained to be too gentlemanly over the years with their midtown rival, but the
Journal
prided itself on its passive aggression toward competitors. Under Steiger, understatement ruled the day. Though the newsroom had stopped recruiting primarily from the Midwest for its leaders, the sensibility still reigned. Murdoch, of course, wanted nothing of understatement. His game was one of splash and headlines, not subtleties and nuance.

Murdoch appeared at the Dow Jones-sponsored "D: All Things Digital" conference in Carlsbad, California, at the end of May and sounded off, once again, that the average story at the paper was touched by a "ridiculous" 8.3 editors. None of the reporters at the paper could figure out where he got such a hyperbolic figure. Papers, Murdoch said, would survive by writing stories people wanted to read instead of stories to win Pulitzer Prizes. Editors began to adjust to this familiar refrain.

Oddly, a period of calm followed. The expectation of a violent bloodletting and daily rumors of imminent layoffs gave way to low-level anxiety and a general feeling of hopefulness that perhaps things wouldn't be so bad after all. Thomson put what he called a troika of editors in place to run the newsroom, with another veteran as his direct deputy who would run the paper when he wasn't around. The triumvirate comprised Nikhil Deogun, Deputy Managing Editor, International; Matt Murray, Deputy Managing Editor, National; and Mike Williams, Deputy Managing Editor, Page One. Mike Miller, the former
Journal
Page One editor, became Thomson's senior deputy.

The
Journal
editors and reporters realized they couldn't dig in their heels and resist the changes Thomson clearly wanted. No longer would stories last the gestation of a llama. They wouldn't be overwrought or slowly and painstakingly researched. They would be energetic and full of news. The formula sounded appealing until the editors and the staff slowly began to realize that the
Wall Street Journal,
the paper founded by Dow and Jones and built by Clarence Barron and revolutionized by Barney Kilgore, hadn't gotten to its vaunted status by being a lazy, diminished product that couldn't handle a major news story. There was something in the ecosystem that worked, albeit imperfectly, and the tearing and scraping away that Thomson had done over the past months had destabilized the soil.

As the reporters were growing accustomed to writing shorter stories and scrapping long-term leder projects for news stories, the biggest downturn since the Great Depression hit the
Wall Street Journal
newsroom when it was in the midst of its own crisis.

O
N SEPTEMBER
15, 2008, the
Wall Street Journal
's main story on Page One began simply, "The American financial system was shaken to its core on Sunday." Over the weekend, some of the most vaunted names on Wall Street had crumbled. Lehman Brothers, denied a bailout by the federal government, was teetering on the brink of liquidation. Merrill Lynch, on the verge of collapse itself, had agreed to be bought by Bank of America. The largest insurance company in the world, AIG, was desperately trying to raise cash to avoid ruin. Ten major commercial and investment banks pooled $70 billion to create a lending facility for their ailing brethren.

The turmoil in the markets marked the first time since September 12, 2001, that the editors of the
Wall Street Journal
thought the events of the day warranted a headline that ran across the entire width of the front page. (Prior to that, the only other banner headline of the sort announced the attack on Pearl Harbor.) Across six columns of the paper in huge, bold font, the paper announced:
CRISIS ON WALL STREET AS LEHMAN TOTTERS, MERRILL IS SOLD, AIG SEEKS TO RAISE CASH.
Then, the unusual became quotidian: the rest of the week the
Journal
carried similar paper-spanning headlines.

The week also marked the first time that Rupert Murdoch sat in on the paper's morning news meetings. He said little and attended only a few, but his presence alone was remarkable. Never had a Bancroft requested or received an invitation to go to a news meeting. Peter Kann rarely saw the inside of a
Journal
news meeting. Yet, after all the concerns—and denials—that he would meddle in coverage, there Murdoch was. Murdoch found great entertainment in being at the table of the nation's top financial newspaper while the nation's financial system was collapsing. "Nobody could fail but to be excited by the whole thing unraveling," he later remembered.

The paper spent the next few months in a convulsion of newsgathering. The journalists broke plenty of news, but the paper, which had adopted a new editing "hub" under Thomson that September, was a mess. The "hub," designed to centralize the power of the news desk and break some of the tyranny of the bureau chiefs who oversaw groups of reporters, had a rocky beginning. Stories that were filed to the editors through the new system were often lost. The paper's notoriously early deadlines, which Murdoch had said repeatedly he hoped to move later so the
Journal
could be more competitive, moved earlier instead so the "hub" wouldn't miss "lockup," the hour when the paper needed to be sent to the printers to avoid costly delays and missed deliveries. "Most of us were able to get our college papers out more effectively," one reporter joked.

Word came down from Thomson that reporters needed to be more "productive." The top editors began paying more attention to byline counts for reporters, a measure of how many stories a reporter produced for the paper. Leders sat on the Page One desk for months, usurped by news of the market's fluctuation on a given day. Veteran reporters said that reporting daily on the dips and rallies of the stock exchange with banner headlines across Page One made the
Journal
seem naive. These hurried and perfunctory dispatches failed to explain for readers why the entire system was wobbling. Slowly, the supply of leders started to dry up. "Incentives have consequences," reporters said to each other, as they scurried to please their editors by penning brief news stories for the following day's paper.

Not everyone was despairing of the
Journal
's new direction. On June 26, 2008, Ivanka Trump stopped by to talk to Robert Thomson and declared cheerily, "I just love what you've done with the front page!" Tina Brown praised Murdoch's influence: "I think he's put muscle into it, flair and focus," she said.

News Corp. editors engineered some of the chaos intentionally. Murdoch's newsrooms were often chaotic and boisterous, exactly the opposite of the
Journal
newsroom, which staffers often compared to an insurance company. That atmosphere confirmed to Thomson the plodding, overly planned nature of the
Journal.
With his reorganization, he wanted to rattle the reporters and editors, turning the paper into something more recognizable to both him and his boss.

The world was gripped by financial collapse, but the
Journal
often focused inward on its own tumult. The paper didn't step back to explain how the world got to where it was. To do so would have taken it away from the most urgent news of the day. The paper still managed fantastic reconstructions of key events, the midnight meetings in corporate boardrooms and the desperate brinkmanship of business titans and government appointees—the "tick-tocks" for which they were famous. The paper published remarkable stories on the downfall of Bear Stearns and the management lies at Lehman Brothers. But the readers of the
Journal
were left without a sweeping explanation of the systemic causes of the crisis. The paper didn't muster coverage to match the historic nature of the moment. Thomson, who had decried the culture of the
Journal,
now had to reap what he had sown: the newsroom was in a state of confusion with no strong editorial voice leading the coverage.

"Sending the staff to chase news like so many hamsters on a wheel is not the same as editing a great newspaper. Neither is festooning page one with the news everyone else already has," the
Columbia Journalism Review
lamented in December 2008, for a piece entitled "In the Crisis, the
Journal
Falls Short."

Though he knew from the moment Murdoch won the paper that he would play a significant role in the
Journal
's future, Thomson hadn't actually planned to be the
Journal
's editor. He had his eye on bigger targets. He thought he would climb within the ranks of News Corporation. He had, he told people, already been the editor of the
Times
of London. At the
Journal,
Thomson grew lonely for the camaraderie of his old colleagues. He remained distant and difficult to discern for the
Journal
's editors. "It's almost a year in, and we're tired of being on probation," one said.

Thomson's impression of
Journal
editors and reporters as out of touch was cemented at the Democratic National Convention in Denver at the end of August. The
Journal
's Washington bureau chief, John Bussey, had suggested he and Thomson have dinner one night. Instead of arranging a dinner surrounded by other journalists and potential sources, Bussey, always mindful of budget restraints, took Thomson to a pancake house in suburban Denver. The Australian dined on a stack of plain, undressed pancakes and retired to the hotel. Just when the evening seemed like a complete failure, his cell phone rang. "Hey, we're here with some of Obama's top aides and they want to meet you," the voice on the other end said. It was Gerard Baker, the British-born
Times
of London's U.S. editor. Thomson joined Baker for an evening of drinks and schmoozing, leaving Bussey alone. "
Journal
reporters should drink more," Thomson later joked.

Baker was known for his right-leaning columns in the
Times.
After Michelle Obama said that her husband's candidacy made her proud of her country for the first time, he wrote a column headed, "Obama: is America ready for this dangerous left winger?" In another column, he satirized the enthusiasm surrounding Obama's candidacy, likening him to a messiah, and read the piece aloud on Fox News's right-wing
Hannity & Colmes
show.