By: E&P Staff
As word spread this afternoon that Rupert Murdoch had apparently finally won over enough of the Bancroft family to capture Dow Jones Inc. and the prized Wall Street Journal, responses from all corners of the media — and political — world started emerging.
The Journal, just before 3 p.m., explained the main reason for the Bancroft shift: The Dow Jones board agreed “to create a fund to cover payments to firms advising Bancroft family members, including Merrill Lynch and the law firms Hemenway & Barnes and Wachtell, Lipton, Rosen & Katz. News Corp. would assume these liabilities if it bought Dow Jones. The fees could total at least $30 million, according to people familiar with the situation.”
But The New York Times raised a bit of a red flag a little later, noting, “A family spokesman issued a statement cautioning that the canvas of family members and trusts was still under way, adding, ‘Any suggestion that the process has been completed and/or that a particular level of support has been established is at this point premature.'”
We will carry a few outside responses here as they arrive.
James Ottaway Jr., whose family holds 7% of Dow Jones and who was against the acquisition, said in a prepared statement he was aghast that the defining moment of this months-long saga came down to the fees related to the auction process.
“It is outrageous that anyone should have to pay an estimated $30 million to outside advisors. It is ironic indeed for the Bancroft family to have to pay 30 shekels of silver to their investment bankers, and 30 shekels of gold to their corporate lawyers, for scaring some of them into betraying their 105-year family loyalty to Dow Jones independence.”
Alan Mutter, the San Francisco-based newspaper and new-media consultant, was one of about 60 newsroom employees — including its most famous columnist Mike Royko — who quit the Chicago Sun-Times in 1984 rather than work for its new owner, Rupert Murdoch.
Mutter said he can understand the anxiety and antipathy in The Wall Street Journal’s newsroom — but that he believes Murdoch will not sully its integrity.
Partly, Mutter argued, he will do that because of his experience with his brief ownership of the Sun-Times. Almost immediately upon buying the tabloid, he took it in the direction of the New York Post with big headlines, bigger photos — and relentless circulation promotions such as Wingo.
Readers and advertisers were appalled, Mutter wrote Tuesday in his blog, “Reflections of a Newsosaur.” It was an “embarrassingly poor business decision” that Murdoch is not likely to repeat, he wrote.
In an interview with E&P Tuesday, Mutter said the scrutiny he faces as he takes over the Journal will be far more intense than that he faced buying the underdog paper in Chicago.
“I think, as I said in the piece, the whole world will be watching,” he said. “The fuss about his ownership of the paper makes it a very high-profile thing. People are going to actually be looking for evidence of missteps.”
“I think it will be a good deal for Dow Jones and The Wall Street Journal,” William Dean Singleton, CEO and vice chairman of MediaNews Group, tells E&P. “I think Rupert will probably make it even better. I was never one to sit around wringing my hands over this deal. I thought it was a good deal from day one. Rupert offered $60 a share for a stock that was trading at $36.”
Singleton said worries that Murdoch would hurt the Journal’s editorial independence “are way overdone. … I don’t have a lot of patience for journalists who sit around wringing their hands over change and wish things would stay the way they’ve been.”
Linda Foley, president of The Newspaper Guild, expressed disappointment with the deal, but said the future editorial impact on the Journal “is an unknown. … If News Corp. didn’t get the message that that is important, then they are not listening. We’re going to continue to hold their feet to the fire.”
Lauren Rich Fine, former Merrill Lynch analyst, tells us: “I can appreciate the hand-wringing that comes with a Murdoch-owned Journal, but his track record is fairly straightforward and in the public domain. Now that the Bancroft family exposed their own double standards, I, for one, would be happier with the devil I know.
“Further, as a 19-year veteran of the Street as sell-side analyst, I would further submit that the Journal is not beyond reproach as I recall more than one instance, where, as an informed observer of a company, their reporting on that company was full of innuendo and seemingly made efforts to influence rather than inform. Yet, in my mind, there is no doubt that the Wall Street Journal, editorial page notwithstanding, is the best paper in the country.
“Reporters at many papers across the country have deep concerns regarding the future of their business. There seems to be a sense of entitlement that since what they are doing is important, it should be guaranteed survival. Unfortunately, while I agree completely that what they are doing is important and essential to preserving democracy, the business model is being undermined by the rapid shift of formerly lucrative classified ads to the Internet. Yes, declining circulation is a concern — but not as big a one as the shift of classifieds which hits more to the core of the current pressure on cash flow. Newspapers need to reinvent themselves both online and off and accept that future returns will be much lower. Difficult decisions need to be made such as acknowledging that a paper can?t be everything to everyone.”
David Sweet, at MSNBC.com: “The Mona Lisa should hang in a museum, not a subway platform. The Statue of Liberty should stand unvarnished in New York Harbor, not draped with corporate logos.
“And The Wall Street Journal should be owned by a company dedicated to maintaining its integrity, not one grasping to find content for a yet-to-be-launched cable channel.”
David Carr, at The New York Times: “In the end, the News Corporation’s capture of Dow Jones was quite simple: Rupert Murdoch wanted it more.
“He wanted it more than other potential bidders, like General Electric, Pearson and Ron Burkle, who never came close to challenging his audacious bid. He wanted it more than all the tut-tutting media organizations who offered little more than rhetoric. And he wanted it more in the end than the Bancrofts did ? or at least he offered more than they were able to pass up …
“But his purchase reminds that the unthinkable is often doable, given the loot and the will. Murdoch is buying an American newspaper because he’s a sentimentalist, not because he has shown any particular skill at making money with them. His Midas touch in foreign tabloids, television, movies, and more recently, digital acquisitions, turns a little rusty when American publications are involved.”
Robert W. McChesney, media scholar and president of the media reform group Free Press: “This takeover is bad news for anyone who cares about quality journalism and a healthy democracy. Giving any single company — let alone one controlled by Rupert Murdoch — this much media power is unconscionable.
“Media consolidation has replaced investigative journalism with infotainment, foreign affairs reporting with fluff, and local coverage with cookie-cutter content. Contrary to industry spin, emerging Internet outlets fail to offset consolidation’s affect on journalism. Now Murdoch will control a broadcast network, a cable news channel and a national newspaper — three of the small handful of outlets that set our national news agenda.
Rupert Murdoch — who has never hesitated to use his pulpit to advance his own ideological and business interests — won’t change his ways. But we can change the policies that allow companies like News Corp. to dominate our media. We can only hope the culmination of this deal is the wake-up call Washington needs to start rolling back media consolidation. The first step is to pass new “cross-ownership” laws that would prevent the owner of a national television network from owning a national daily newspaper.
“Murdoch’s empire wouldn’t exist if he hadn’t been aided and abetted by Washington policymakers in Congress and at the FCC. Only by restoring public input in the policy-making process can we create the kind of diverse, accessible and independent media that journalism — and our democracy — so desperately needs.”