Financial Times Editorial Comment: The case for an independent media

Financial Times Editorial Comment: The case for an independent media
Copyright The Financial Times Limited 2007
Published: May 4 2007 22:46 | Last updated: May 4 2007 22:46


“You are in the field to defend the public interest, the financial truth for investors and the funds that should support the widow and the orphan,” said Clarence Barron, proprietor of The Wall Street Journal from 1902 until 1928. The founders of many media companies left trusts and special voting powers to protect such journalism, but with profits hurt by a shift to digital media, those structures are under siege.

Reuters, a financial information provider and the world’s largest news agency, has received an approach. Rupert Murdoch’s News Corporation has bid for Dow Jones, owner of the Journal. Rebel investors, meanwhile, are demanding change at the New York Times Company.

All three targets are protected: Reuters by a trust that can veto shareholdings above 15 per cent; Dow Jones and the NYT by dual-voting structures that guarantee family control. But these defences are not as potent as they once were.

The challenge, in one form or another, comes from the internet. Demand for media content – words, music, video and data – is large and growing, but the way consumers access it is changing. Established distribution channels, such as newspapers, including the Financial Times, must therefore invest to build up their online presence. At the same time, profits from their traditional business and stock market valuations are generally in decline, which makes companies such as Dow Jones vulnerable to bids as never before.

The competitive pressures are visible across the media industry. EMI, the music company, has received multiple bids. Even in the youthful internet media industry there is pressure for consolidation, with talk that Microsoft will buy Yahoo. But it is the news media, with its central role in political debate, where the public interest is strongest.

It is not true that every takeover is bad and companies will always have to produce an economic return. Founding families are not necessarily benevolent and disinterested; new proprietors will not necessarily set out to debauch standards of journalism. Any new owner of Reuters ought to preserve its principles of integrity, independence and freedom from bias. That is the job of the Reuters Trust.

The ownership arrangements at the New York Times have served the journalism of the newspaper well. The Wall Street Journal’s reputation has also been built on a willingness to invest in robust reporting. These are qualities worth defending. A vigorous and independent press is an essential part of the fabric of open societies.

The challenge is to reconcile this public good with the pressures of the marketplace and the legitimate interests of investors. There is no single formula. But it is in everyone’s interest that changes in ownership are accompanied by serious commitments to quality.