After a series of cliffhanging negotiations, it appears that Rupert Murdoch has finally bagged his biggest prize yet. According to this dispatch
, he has won control of Dow Jones & Company, including the jewel in the corporate crown, The Wall Street Journal
. Over the last couple of days, the fate of the deal hung in the balance. Murdoch had made a generous offer of $60 per share--a premium of 67% to the price of Dow Jones stock prior to the Australian mogul's bid. Still, several key members of the Bancroft family, which has controlled the company for more than a century, held out.
What changed their minds? According to CNBC's David Faber, the mounting pile of fees from bankers and financial advisers may have factored in. If no deal went through, the Bancrofts would have to pick up the tab themselves. But now, the Dow Jones board has agreed to create a special fund for these expenses--and once the sale goes through, the bills will be passed directly along to Murdoch's News Corp. As Faber puts it
, none too grammatically:
It did come awfully close, in fact, closer than many had anticipated. But at the end of the day, according to people who were working on this, a number of the Bancrofts who had been somewhat vocal in their opposition--Chris Bancroft for example--seemed suddenly at the realization that they were going to have to pay all these banking fees said, "Wait a second. Hey, if you pay my fees, I'll give you my vote." And that may have turned it.
In his video
on the WSJ site, Dennis Berman (an M&A reporter for the paper) rather delicately summed up the pluses and minuses of the deal. Yes, he acknowledged, a certain segment of the readership was less than enthusiastic about the iconic publication being swallowed up by Murdoch's News Corp. There was also at least one dispiriting moral to the story. "Is it about the legacy or about the money?" Berman asked. "As we see right now, the money won out." On the other hand, he noted that the paper would now be better capitalized, and enjoy an improved position in the global marketplace.
And how does the deal look to those outside the paper? In a recent piece in the New York Review of Books
, newspaperman emeritus Russell Baker had some gloomy thoughts
about a potential Murdoch stewardship:
Rupert Murdoch of course has long spread melancholy in newsrooms around the world, but it was the disclosure in May that the Bancroft family, which controls The Wall Street Journal, might be ready to sell him their paper for five billion dollars that really struck at journalism's soul.... Family control has sheltered [The Wall Street Journal, The New York Times, and The Los Angeles Times] from Wall Street's most insistent demands, allowing them to do high-quality--and high cost--journalism. It was said, and widely believed, that the controlling families were animated by a high-minded sense that their papers were quasi-public institutions. Of course profit was essential to their survival, but it was not the primary purpose of their existence. That one of these families might finally take the money and clear out heightens fears that no newspaper is so valuable to the republic that it cannot be knocked down at market for a nice price. Murdoch at the Journal is a dark omen for journalists everywhere. When the sign in the shop window says "Everything For Sale," it is often followed by "Going Out Of Business."
Baker's distaste for Murdoch is hardly unique. Yet the News Corp proprietor has his defenders, who argue that he's gotten a bad rap. In a recent MSNBC piece, O. Casey Corr refused to join
"the chorus of handwringers" who blame Murdoch for the decline and fall of Western journalism:
For all his flaws, Murdoch may be more a symptom than a disease. He's not the person who started consolidation in the communications industry. He didn't put NBC into the hands of General Electric, CBS into Viacom or ABC into Disney.... In many respects, he's done some good in the industry. He's revived dying newspapers--and preserved jobs in an industry roiled daily by layoffs. He expanded regional coverage of sports. The competitive presence of DirecTV helped pressure nervous cable companies to invest billions of dollars to accelerate service improvements, such as phone service. Fox has given us some great TV shows including "The Simpsons," "X Files" and "24," not to mention the guilty pleasure of "American Idol."
Identifying Murdoch as a symptom rather than a disease is not what I would call a ringing endorsement. But Corr is right in at least one respect: to finger Murdoch as the Great Satan of Media Conglomeration is to ignore how pervasive the phenomenon has become. Will the Wall Street Journal
thrive under his banner (or thumb)? Will he leave this trophy acquisition to its own devices or effectively take control? Feel free to weigh in with your own thoughts and predictions!