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Murdoch vs. Sulzberger: Newspaper Land Grab

It's a battle of the newspaper moguls.

Rupert Murdoch
Nick Laham | Getty Images
Rupert Murdoch

Rupert Murdoch's Wall Street Journal and Arthur Sulzberger's New York Times are fighting over Manhattan readers and pushing to build a foothold in local editions.

The two sides are pulling out all the stops when it comes to serious snark and mudslinging, despite the fact that local newspaper ads have plummeted thanks to the downturn and an industry shift away from traditional newspaper ads and towards the web.

ZenithOptimedia just reported that online advertising spending would soon match and then surpass the amount spent on newspaper ads. This further supports the theory that the best hope for newspapers is their online divisions — not the papers themselves — to grow as the economy recovers

Today the Wall Street Journal launched its New York City section, a direct attack on the New York Times. Under the banner of "Greater New York" the hallowed financial paper will tackle New York-area news, culture and sports. Murdoch is counting on the Wall Street Journal's business model — a combination of a subscription service and ads — to work with the affluent New York audience that's so appealing to advertisers. And he seems entirely undeterred by the fact that Wall Street has been quite critical of his newspaper holdings. The company has written down $3 billion of the $5.7 billion spent on the journal's parent, Dow Jones.

Murdoch is taking no prisoners — investing some $30 million in the new section, according to some reports. He's trying to lure businesses that aren't advertising in the WSJ or the Post with cut rate prices, charging local businesses just $19,000 for a local ad, instead of the $90,000 that kind of ad usually sells for. The Wall Street Journal's revenue officer boasted in a statement emailed around to journalists that the New York Times' ad revenue has dropped 12 percent while the Journal's grew 25 percent last quarter.

The New York Times defended itself, publisher Arthur Sulzberger and CEO Janet Robinson sent a memo to their staff titled "A New Competitor Arrives." It runs down some of their impressive circulation and advertising numbers — the paper reaches over 900,000 affluent readers in the New York area, and its audience is the most influential. This comes as the New York Times moves forward with plans to launch local editions in a half dozen cities across the country.

Here's an excerpt from the memo to the Times' staff:

"After 120 years of existence, The Wall Street Journal this morning has finally decided to cover New York north of Wall Street. In the spirit of journalistic camaraderie, we welcome the Journal’s new local section. The New York Times has been the paper of record in New York for nearly 160 years, and we know just how difficult it can be for start-ups to develop a following.

While there will be much sound and fury to this new endeavor, we thought we would take this opportunity to remind everyone about our position of strength in the New York marketplace. We will include a series of numbers that, to borrow a phrase often misused, are “fair and balanced.”

News Corp reports earnings next week — we'll see if Murdoch has anything to say about his investment.

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