Wall Street Journal Managing Editor Brauchli Resigns (Update3)

By Gillian Wee

April 22 (Bloomberg) -- Wall Street Journal Managing Editor Marcus Brauchli resigned four months after the newspaper's acquisition by Rupert Murdoch's News Corp., saying he'll make way for the new owner to pick the next leader of the newsroom.

News Corp., which took control of the Journal with the $5.2 billion purchase of Dow Jones & Co. in December, has started a search for Brauchli's successor. He will stay on as a consultant, the New York-based company said today in a statement.

Brauchli's departure, after less than a year in the top editorial post, was announced following a meeting with a special committee set up to ensure the Journal's independence. Murdoch is broadening political and arts coverage to compete with the New York Times. In December he brought in Robert Thomson, editor of News Corp.'s The Times of London, to be publisher.

``Murdoch definitely wants his own people there,'' said Charles Wrubel, managing partner of AdMedia Partners, a New York consulting and investment banking group. ``They'll bring in somebody from one of his other properties.''

Murdoch plans to expand the Journal overseas and is also offering more content for free at WSJ.com. The new editor will probably hail from The London Times, Wrubel said. ``I can't imagine him bringing in someone from the Post.''

Dow Jones Chief Executive Officer Richard Zannino and Wall Street Journal Publisher Gordon Crovitz quit in December. Zannino was replaced by Leslie Hinton, previously chairman of News International.

New York Expansion

Brauchli, 46, became managing editor last May, replacing Paul Steiger. He previously served as deputy managing editor and oversaw a redesign of the newspaper introduced in January 2007.

``The new owners should have a managing editor of their choosing,'' Brauchli told Journal staff in a letter distributed by News Corp. ``The new management scrupulously has avoided imposing any political or business viewpoints on our coverage and rigorously has enforced the code of conduct.''

In his new role, Brauchli will advise senior News Corp. management on the Journal as well as the possibility of starting a business news channel for Star TV in Asia, according to the statement. His exit from the Journal is amicable, the Dow Jones special committee said in a separate statement. The group said it will ``exercise its responsibility in connection with the selection of a successor.''

News Corp. Class A shares, down 12 percent this year, fell 50 cents, or 2.7 percent, to $17.96 at 4:01 p.m. in New York Stock Exchange composite trading.

Murdoch is moving to further expand News Corp.'s newspaper holdings in New York, where the company owns the New York Post as well as the Journal.

Copyreader Job

News Corp. plans to buy Long Island's Newsday newspaper from Tribune Co. for $580 million, two people with knowledge of the negotiations said today. Murdoch would combine the Post in a venture with Melville, New York-based Newsday, said the people, who requested anonymity because the terms aren't final.

A Columbia University graduate, Brauchli was a Nieman Fellow at Harvard and is a member of the Council on Foreign Relations. He joined Dow Jones in 1984 as a national copyreader with AP-Dow Jones.

Brauchli led the Journal's news desk through two U.S. presidential elections, the 2000-2001 stock-market downturn, corporate scandals, the Sept. 11 terrorist attacks and the wars in Afghanistan and Iraq. Before that he spent 15 years reporting from countries including Cambodia and China.

`Handwriting on Wall'

``The handwriting was on the wall,'' said Richard Dorfman, managing director of New York-based investment firm Richard Alan Inc. ``It was a combination of Murdoch wanting to put his mark on the management team, coupled with the view from the other side that, `Things are changing and I am losing power and maybe its time to head off for greener pastures.'''

Steiger held the post for 16 years, longer than any of his predecessors.

The editorial committee was created to oversee hiring and firing of the newspaper's top editor, and changes in their responsibilities. The members include former Associated Press Inc. President Louis Boccardi and former Tribune Co. executive Jack Fuller.

Murdoch agreed to the arrangement to win approval from Dow Jones's controlling Bancroft family for a takeover of the newspaper publisher after three months of negotiations.

News Corp., also the owner of Barron's and Dow Jones Newswires, competes with Bloomberg LP, the parent of Bloomberg News, in providing financial data and news.

The Journal is the second most-widely circulated newspaper in the U.S. after Gannett Co.'s USA Today.

To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.

Last Updated: April 22, 2008 17:05 EDT

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