There is no doubt that Rupert Murdoch, who is known for being a hands-on owner, has major plans to change the Journal.
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Mr. Murdoch's News Corp. had said it would keep pursuing Dow Jones only if it received approval from Bancroft family members controlling an unspecified proportion of voting stock, but that mark seemed to have been met yesterday once reports in the Journal and elsewhere said the boards of both companies had signed off on a deal.
Letter to readers
The Journal soon distributed a copy of a letter to readers that it said would appear in today's edition.
"Now a majority of the Bancroft family, which has controlled Dow Jones since financial-journalism pioneer Clarence Barron bought out Charles Dow, Edward Jones and the other founders in 1902, has decided to sell its shares to News Corp.," reads the letter, signed by L. Gordon Crovitz, publisher of the Journal.
"What would a sale mean to the Journal and, most importantly, to readers? You will make the ultimate judgment, but the talented and committed journalists who produce the Journal have a simple plan. They will aim to do what they have done for more than a century: Earn and keep the trust of the world's most demanding readers by delivering the most essential news and analysis."
That may be true of the paper's reporters, editors and other newsroom staff, but there is no doubt that Mr. Murdoch, a business tycoon after all, has major plans to change the Journal. More important than his previously professed dislike for the Journal's long front-page features, he is expected to transform the paper to compete more directly with The New York Times. If that means adding a daily sports section, we may well see one within a few years.
He's also likely to remake the nearly 2o-year-old Saturday edition, which has fallen behind its goals this year, perhaps into something like The New York Times Sunday Magazine.
And there's room to improve in marketing and ad sales, whose staffs were some of the most enthusiastic Murdoch supporters.
In the press release announcing the deal, Mr. Murdoch is quoted as saying, "Dow Jones is a vibrant company and one of the world's greatest media franchises, with a portfolio of brands that has no equal in financial information and business journalism. In combination with News Corporation's assets, The Wall Street Journal and the other Dow Jones operations will be even more formidable competitors as we profitably extend their invaluable information across our print, broadcast and digital platforms around the world."
Opponents of the deal had lobbied the Bancrofts to vote "no" because they feared Mr. Murdoch, the hands-on owner of media properties including Fox News and the New York Post, would influence its coverage to favor his interests. The union representing many Dow Jones employees also argued against a sale to Murdoch, going as far as trying to recruit white knights. Members of the Bancroft family, which owned 64% of the voting stock through a complex set of trusts, also tried to find other alternatives to no avail. After first rejecting Mr. Murdoch, the family then found itself forced to consider the deal when news of the extraordinarily high offer of $60 a share became public. The offer split the family, with some urging a sale and others, such as Christopher Bancroft and Leslie Hill, fervently opposed.
A Bancroft family spokesman sent out a statement that read, in part, "The process of thoroughly reviewing a broad range of possible alternatives for Dow Jones has been long, complex and arduous. After much soul-searching, hard work and analysis by Bancroft family members, trustees and advisors, shares held by family members and trustees representing approximately 37% of the company's voting power have been committed to support the News Corporation transaction.
"All the members of the Bancroft family, wherever each came out on the News Corporation proposal, share a deep love for Dow Jones, its people, its publications and its brands. It is our most fervent hope that in the years to come, The Wall Street Journal will continue to enjoy, and deserve, the universal admiration and respect in which it is held all over the world, and that the Journal and Dow Jones' other print and online publications will continue to achieve great things as part of a larger, well-capitalized, global organization committed to upholding the long tradition of journalistic excellence, independence and editorial integrity of which we are all so proud."
Dow Jones Chairman M. Peter McPherson said, "Having thoroughly reviewed News Corporation's proposal, the Dow Jones board has overwhelmingly voted to approve the definitive merger agreement. This decision has been difficult and emotional for a great many people because of the long history of this great institution. The board has concluded, with a great deal of family support, that the proposal provides outstanding financial value and provides excellent opportunities to the extraordinary Dow Jones franchise. Also, we wish to thank the Bancroft family for their years of faithful stewardship. The editorial independence agreement proposed by the Bancroft family is a strong agreement about which all can be pleased."
The terms of an editorial agreement provides for the establishment of a five-member committee with the objective of assuring the continued journalistic and editorial integrity and independence of Dow Jones' publications and services. The initial members of the special committee will be former Associated Press CEO Louis Boccardi; Thomas Bray, former editorial page director of The Detroit News; former congresswoman Jennifer Dunn; Jack Fuller, former president of Tribune Publishing; and Nicholas Negroponte, co-founder of Massachusetts Institute of Technology's Media Lab.
Because the deal still requires a vote from the public shareholders, expect even louder protests from groups concerned about Mr. Murdoch's politics and his concentration of powerful media assets. It's almost certain, however, that the public shareholders will, in the end, speed the sale toward completion far more easily than the Bancrofts did yesterday. The merger is expected to close in the fourth quarter.