Civil War At The Wall Street Journal

Of all the cliques at the Wall Street Journal, the reporters and editors of the newspaper's Money & Investing team were most inclined to accommodate to the new régime put in place by Rupert Murdoch. They're more financially sophisticated than the average Journal reporter, and less precious; the head of the paper's third section is thought friendly with Murdoch aide Gary Ginsberg, and has even been mentioned as a candidate for managing editor; and Money & Investing is widely regarded as the newsiest part of the Journal, in need of less of a re-education than the self-indulgent feature writers of the main paper and the second section, Marketplace. And that's why this week's disastrous pep talk by the Australian media mogul's key lieutenant, Journal publisher Robert Thomson, is so damaging.

Robert Thomson, former editor of Murdoch's London Times, is a charmer, as we've written. (Disclosure, I used to work for him at the Financial Times.) A former colleague reported that the Times newsroom was "the happiest place to work on Fleet Street." But his emollient side was not so obviously on display at Monday's meeting: according to two attendees, Thomson berated the assembled reporters for their lack of aggression in reporting news and their arrogance. The Journal, he said, took this attitude: "If we haven't written about it, it's not news."

Now that is apparently a general complaint of Murdoch and his henchmen, who want the Journal to compete more fiercely for both political and business scoops—and the criticism not entirely unwarranted. Thomson, Australian and 30 years to the day Murdoch's junior, is the product of the more robust newsroom cultures of Sydney and London; Journal reporters are unaccustomed to such frank talk from their bosses. And all that Thomson meant to say—we understand—was that the Journal was now in an ultra-competitive world in which it had to be conscious of the challengers, old and new. Uncontroversial enough.

But his sensitive audience took his remarks the wrong way. The newspaper had just that morning published an exclusive on the gigantic $23bn bid by Mars and Warren Buffett for Wrigley, the chewing gum makers. According to one attendee, stock market reporter Jim Browning said he was "personally offended" by the suggestion that the newspaper's reporters didn't try to break news. Thomson's joke—that former managing editor Paul Steiger was extremely competitive on the softball field—failed to defuse the tension.

The Journal is still reeling after News Corporation executives pushed out Marcus Brauchli in order to install a more amenable managing editor at the paper. It has only been a week. Until the new hierarchy is clear, the staff will naturally be jumpy and quick to take offense. Murdoch's newspaper acquisition drive still makes as much sense as we thought a week ago. However, if News Corporation can't even win over the potential collaborators, the occupation of the Journal will be all the more bitter. The infighting is already pretty ugly.

• Nik Deogun, the head of Money & Investing and widely seen as a potential quisling, is now telling colleagues he's not in line for the managing editor job. Some of his more fevered internal critics thought they detected glee on the day Marcus Brauchli's departure became public.
• Paul Steiger and Marcus Brauchli, the last two managing editors of the independent Journal, have taken the brunt of newsroom anger. "Steiger who is being villified for advocating the sale to Murdoch when he had so much to gain from it. This guy was beloved and now is being talked about like a greedy bastard who is no different than the Wall Street guys brought down on his watch. People are talking about how he who sold out so he could afford his young 30-something wife." (Here's her bosom-revealing blog.)
• Kathryn Kranhold, the Journal's much-respected reporter on GE, has quit with no new job in the offing. "It's a huge loss," says a colleague.
• Bill Grueskin, deputy managing editor, has commissioned an investigative piece on the eviction of Marcus Brauchli—and the special committee that was supposed to protect the Journal's editorial independence from Murdoch. (In charge is Steve Stecklow, one of the paper's most rabid investigative reporters.) But ungenerous colleagues suspect his position is vulnerable, and Grueskin is merely casting himself as a defender of the Journal's integrity, and a martyr.
• John Bussey, the DC bureau chief, is touted by allies as a candidate for the top editorial job. But he must be one of the most widely disliked executives at the paper: since we mentioned his name, the hostile tips have outnumbered the plaudits by about 2 to 1. More on Bussey later.
• Alix Freedman, supposed guardian of the Journal's ethics, was forced to explain to a group of new employees why she had killed the newspaper's exclusive on the ouster of Brauchli. At the orientation, she explained that the paper didn't like to air its "dirty laundry". Um, isn't that what newspapers are supposed to do?

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