While Tribune Co. is working up its latest round of job cuts at the Los Angeles Times and the Chicago Tribune, News Corp. is busily building up the The Wall Street Journal.

The contrary approaches that the new owners are taking at some of the nation's best and most respected media outlets raises an interesting question:

Who is the smarter newspaper owner—Sam Zell, the distressed-asset investor who's nickname is "the Grave Dancer," or Rupert Murdoch, the avaricious media mogul known to some as "the Rotten Old Bastard"?

On the surface, there are many similarities. Both are considered business rogues. Both embrace public conflict, conjuring an irrational fear in their opponents. And both provoke extensive teeth-sucking among journalism's high priests.

There are differences between the two men, however. Significant differences. And they make all the difference to the people who work at the newly acquired newspapers—and the people who read them. Here are five realities that make Murdoch the preferable acquirer of journalistic jewels.

 

1.  Zell bought something of value; Murdoch bought something of unique value.

The Los Angeles Times has been one of the three or four best newspapers in America for at least two decades, and the Chicago Tribune would likely make most Top 12 lists.

Those are great assets, because only the strongest newspapers with compelling brand names will survive the transition to a digital world. Unfortunately, both papers operate in the world of general news, where the competitive set is virtually unlimited, and thus differentiation is extremely difficult.

The Wall Street Journal, on the other hand, operates as the clear leader in a unique segment—business news.

As a business, business news is far superior to general news. The audience is affluent, growing, and quite willing to pay for something they perceive of value. Business people value the Journal's take on a story over the alternative takes, and can either expense the subscription, or easily pay it themselves.

That's why Murdoch is already backing off his initial assumption that he would quickly abandon the WSJ.com's uniquely successful pay model.

2.  Murdoch sees a bigger play; Zell sees stand-alone assets.

Murdoch "overpaid" for Dow Jones because he did not value the Journal for what it is on its own. He valued it as the non-replicable engine of a global business news machine that will cut across all platforms. He's already created a business news television network to eventually attach to it, and look for him to continue assembling and integrating new business news assets around the world.

Consequently, Murdoch views the Journal as an asset that should be strengthened. That's why he's culling the bottom 10 percent of the Journal's newsroom producers, and quietly raiding his competitors for the top 10 percent of their staffs.

Zell, on the other hand, believes the Los Angeles Times and Chicago Tribune must be restructured to work within their traditional business models, which unfortunately are imploding.

Thus, while he knows that his new properties must ultimately generate top-line growth, he's got far more clarity about what actions are required to reset the cost structures to fit current revenues.

Both Murdoch and Zell need to come to a common realization: The natural competitor to the New York Times as America's premier, high-end national newspaper is not the Wall Street Journal. It's the Los Angeles Times, which can bring a quality newspaper to America's NPR crowd, but without the words "New York" in the masthead.

The more the Journal chases after the New York Times's general news audience, the less progress it will likely make in broadening the global appeal of its business coverage.

3.  Murdoch willingly takes risks in buying assets; Zell only buys assets when he can avoid risks.

Except for his earliest acquisitions, Murdoch typically buys from a position of financial strength, and constructs the deals to give him maximum flexibility after the purchase. Zell's orientation as a scavenger of distressed properties causes him to take a purely buy-low-sell-high transactional view of every deal.

For all of his perceived boldness, one of Zell's big strengths is actually the conservatism he shows by using other people's money—or, as he has done with Tribune Co., even someone else's Employee Stock Ownership Plan—to do his deals.

That lowers his up-front risk significantly, but it also usually straps the new property into a skin-tight economic model, with little room for either creativity or unexpected headwinds.

4.  Murdoch knows how to focus attention; Zell only knows how to attract it.

Both men supposedly understand how to use controversy to advance their agendas, but Murdoch's approach is far more conscious.

Murdoch tends to focus the controversy on the issue he wants to see framed, such as "will the evil News Corp. be a better parent than the dysfunctional Bancrofts?"

Zell, on the other hand, often makes himself the controversy, such as cursing on camera at an female employee.

5.  Zell relishes being an outsider; Murdoch only relishes appearing to be an outsider.

In reality, Murdoch puts a far greater premium on wielding extraordinary power and influence, which only come with actually being an insider.

Consequently, Zell indulges his own personality at the expense of his business, while Murdoch frequently parks his personality to get what he wants.

Even taking all of this into account, there are two good reasons not count Zell out quite yet. First, he's a notoriously fast learner, and he clearly burns to make a success of his most public deal ever. And second, history tells us that many of the great media empires were actually built by hamfisted tyrants who occasionally knocked over a desk or two.

 

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• Business Spin: Tribune Co.—I Sams What I Sams
• Business Unusual at Tribune Co.
• Lessons From a Former Murdoch Man