Rupert Murdoch Scandal’s Les Hinton Twist Raises New Fears at Wall Street Journal

Journal staffers now fear they could end up working for a controversial new editor. By Nick Summers.

Mark Lennihan / AP Photo

As the British wing of the News Corp. media empire imploded this month under the weight of a series of ethical scandals, staffers at The Wall Street Journal--itself a News Corp. subsidiary--might have considered themselves insulated from collateral damage. They were an ocean apart, and more to the point, they did not engage in reprehensible reporting tactics.

Anyone thinking that that would be enough, however, would have been wrong.

Les Hinton, the publisher of the Journal and CEO of its parent, Dow Jones, resigned Friday, the latest executive casualty in a scandal that has dominated the business press since July 6, ever since News Corp. acknowledged that one of its tabloids had hacked the voicemail of a 13-year-old murder victim. Hinton had run that wing of the company at the time, and in the interim had crossed the pond to run Dow Jones after News Corp. chairman Rupert Murdoch bought it in 2007.

Wall Street Journal reporters had already been wrestling with how to cover the story of their boss Rupert Murdoch’s crisis, producing through the awkwardness work that even rivals describe favorably. Hinton’s departure adds a further measure of instability to their world.

As some of the best financial journalists in the game, Journal staffers are accustomed to noting a corporate development and quickly looking downfield. What they see in their own shop is now cause for concern.

Among the leading candidates to replace Hinton as CEO is Journal editor Robert Thomson, who previously served as publisher of the newspaper before assuming the news helm. Women’s Wear Daily’s media column floated Thomson as a contender Friday evening, quoting a Journal executive: “On the print side, Rupert has lost today the two closest colleagues he has in the world [Brooks and Hinton] and the only one who remains with anywhere near that amount of trust with Rupert is Robert.” (Brooks is Rebekah Brooks, the editor of the hack-happy tabloid under Hinton, who also resigned Friday.)

If Thomson is elevated to CEO, the natural choice for his replacement as editor is the paper’s No. 2, Gerard Baker. While Thomson has been largely accepted by Journal staffers, who were fearful that the conservative Murdoch would install a clearly partisan editor after purchasing the broadsheet, Baker is viewed as being much more in the mold of the typical Murdoch meddler. The tycoon has a pattern of buying publications with promises of safeguarding their editorial voice, then installing his own people. Owing to this history, howls of protest met Murdoch’s pursuit of Dow Jones and the Journal in 2007.

Is Baker in charge the nightmare scenario?

“Yeah,” a Journal reporter told The Daily Beast, when the Hinton resignation was barely two hours old. “I think the public perception matches the newsroom perception on those two. Robert is this serious journalist, and Gerry has his right-wing views. … He’s definitely in the newsroom aligned more as a partisan.” Baker’s political views are visible in columns he wrote for The Times of London, another News Corp. publication. Politico, reporting his hiring as Journal deputy editor in chief in 2008, noted that Baker was a “self-described ‘right-wing curmudgeon.’”

Thomson and Baker did not respond to requests for comment.

“Here are the worries [if] Robert goes back to being publisher,” the Journal reporter said. “One scenario is that Gerry takes over, and that’s terrifying. The newsroom trusts him less. … Another one is that some News Corp. person comes in and there are mass layoffs. The third is just that News Corp. spins us off, and the other papers. Which I think is a real [possibility now].” As the phone hacking scandal has developed, analysts have differed on how likely it is that Murdoch will sell his newspaper properties, which he holds dear but act as financial drains.

Although multiple Journal staffers professed nervousness Friday, a Thomson-to-CEO, Baker-to-EIC chain reaction is hardly certain.

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“Robert was publisher in name only, for the most part. Les Hinton was already in place,” a Dow Jones veteran emailed The Daily Beast. “So don’t read too much into that previous title.” A likelier successor to Hinton, he suggested, is Todd Larsen, who currently serves as Dow Jones president, and who is credited with convincing Murdoch to keep the Journal’s Internet subscription model, which proved successful. The most obvious knock against Larsen is that far from having ink in his veins, his background is in management consulting: he came to Dow Jones in 1999 from Booz Allen & Hamilton. The flip side to that thinking, however, is that he has never worked at News International—and given all that’s going on, any Murdoch loyalist who has may be too toxic for the job.