Something Gained, Something Lost
July 31, 2007
The New York Times reported this morning that "Rupert Murdoch finally won his long-coveted prize today, tentatively gaining enough support from the deeply divided Bancroft family to buy Dow Jones & Company, publisher of The Wall Street Journal". This has huge implications. From the Times.
For Mr. Murdoch, the Dow Jones takeover gives him not only one of the world's great media trophy properties and a larger voice in national affairs, but also a ready source of material and credibility for his newest big gamble, the Fox Business Channel he plans to launch in October. Under a deal with CNBC, that channel has the exclusive right to use Dow Jones content and have Dow Jones reporters and editors appear on its programs until 2012. But Mr. Murdoch, whose new channel would compete with CNBC, has long been known for taking the long view, willing to wait years for his investments to pay off. Dow Jones's centerpiece is The Journal, with domestic circulation of more than 2 million six days a week, second only to USA Today, but the company also includes many other parts, like the financial weekly Barron's, Dow Jones Newswires, the Web site MarketWatch and Factiva, an electronic news archive and information service.Even if Mr. Murdoch is sincere in his insistence that the newsroom at the Journal will remain as independant as it always has been, this acquisition is sure to affect how we receive our business news. I am personally saddened by all this. The Bancroft family has owned Dow Jones and the Journal since 1902, and before this episode, I had never really known they existed. Since I've learned more about them recently, I had some hope they could resist the pressure to sell to NewsCorp. That hope seems to have been dashed this morning. Again from the Times...
Dow Jones is discussing a plan to have News Corp. cover the legal fees incurred by the Bancroft family, amounting to at least $30 million, the Journal reported on Monday. "After all the high-minded concerns about editorial interest and journalistic excellence, it gets down to who pays the legal fees for the Bancrofts," Benchmark & Co. analyst Ed Atorino said. "And some of the trustees bailed, fearing they'd get sued by some of the younger trust beneficiaries if they voted against the deal -- so much for principles." Some members of the Bancroft family had said they opposed Murdoch's bid because they believed he would interfere with Dow Jones' news operations, while others were seeking an even richer premium than the 65 percent premium News Corp. offered.The Bancroft family gave the paper their financial backing, but more importantly, they gave it independence. As I mentioned earlier, Murdoch insists that the paper's journalistic independence will remain, but I find it hard to believe it will be as great in their new home at NewsCorp. And this is not even mentioning what will happen to the other properties NewCorp will acquire along with the Journal. Looking around the country, there are fewer and fewer independent voices out there. I think that has to affect the diversity of opinions in the discussion of business ideas being presented to the public. For our small part, we here at 8cr are committed to diversity in the marketplace of ideas, and we will continue to bring them to you independently.