“The Bancroft family has accepted,” John Prestbo, editor and executive director of Dow Jones Indexes, told reporters Tuesday in Chicago. Dow Jones “will be part of News Corp,” he said.
Negotiations for a sale had stalled Monday over the issue of payment of advisory fees to the Bancrofts in order to gain support for the deal from family members who were holding out, according to the Journal.
Bancroft family members owning 32% of Dow Jones’ overall votes have agreed to support News Corp.’s bid, according to WSJ.com. The Bancrofts as a whole control 64.2% of the overall votes in Dow Jones.
With the sale an apparent fait accompli, the focus is likely to shift to potential synergies between Dow Jones and News Corp., and how advertisers can benefit from the deal.
In addition to the flagship Journal, Dow Jones’ properties include WSJ.com, Barron’s, Dow Jones Newswires, Dow Jones Indexes, MarketWatch, the Ottaway group of community newspapers and, in partnership with Hearst Corp., SmartMoney.
In addition to satellite-TV service BSkyB, 20th Century Fox, Fox Broadcasting Co. and MySpace, News Corp. owns the New York Post, The Weekly Standard and dozens of newspapers in Australia and the U.K.
Dow Jones’ resources are expected to play a key role in providing content for the Fox Business Network,
“This is an Internet-TV play,” said Mark Edmiston, a managing director at media investment bank AdMedia Partners, referring to the deal. “Of course, Dow Jones produces a newspaper, but Murdoch is going to work the electronic side. He wants [the Journal] distributed on new platforms, which is something the current Journal hasn’t been very successful at,” he added.
Edmiston said he doesn’t expect any advertising fallout from the deal. “News Corp. is not going to scare away any advertisers,” he said. “The Journal is still a great brand and is known for excellent business coverage.”
Richard Mead, a managing director at media investment bank Jordan, Edmiston Group, said the deal should “unlock the power of Dow Jones.” In particular, News Corp. should be able to help Dow Jones leverage the Journal throughout international markets, he said.
A major sticking point in the negotiations was how to protect the editorial independence of the Journal.
According to an agreement in principal between Dow Jones and News Corp., there will be a stand-alone committee of five members—the Special Committee—comprised of “distinguished community and journalistic leaders.” They will be independent of News Corp. and the Bancroft family, and will be initially agreed upon by News Corp. and Dow Jones.
The Special Committee will have approval rights over the appointment and removal of the managing editor and the editorial page editor of the Journal and the managing editor of Newswires.
News Corp. has scheduled a board meeting for 4 p.m. this afternoon, when it will decide its next step, according to WSJ.com. Dow Jones’ board is due to meet this evening.