Dow Jones Owners to Consider Murdoch Bid
STEVE INSKEEP, host:
It's MORNING EDITION from NPR News. I'm Steve Inskeep.
When the owners of the Wall Street Journal said they would never sell to Rupert Murdoch, plenty of analysts wondered if never really meant never. Murdoch was offering to pay $5 billion, a very high price for the company that owns the newspaper. And now the Bancrofts, the family that said never, has changed that to maybe. NPR's David Folkenflik covers the media. And David, what actions are the Bancrofts taking?
DAVID FOLKENFLIK: Well, as you say, I guess it's like the "Bond" movie, "Never Say Never Again." They've done essentially a 180-degree turn, saying they will entertain bids from Rupert Murdoch and his News Corporation, as well as for other potential suitors, although none have yet emerged. They're actually going to actively meet with him and company officials to consider his offer.
INSKEEP: Why didn't they agree to talk before?
FOLKENFLIK: Well, Rupert Murdoch is Rupert Murdoch, which is he's brash, he comes from Australia, he comes from a very different press tradition. The Bancrofts are sort of, you know, journalistic aristocracy, like the Sulzbergers of the New York Times or the Graham family for the Washington Post. He has a tradition of using some of his properties, his critics and even some of his former employees, say, to cozy up to power to leverage his assets as media outlets.
In China, for example, he took several actions that were criticized, seen as cozying up to authorities there in a way that would allow him to get concessions for his media properties. He was seen as backing a number of conservative candidates through his outlets in London, but then surprisingly cozying up to Prime Minister Blair there when that became expedient.
INSKEEP: Okay, so you say Rupert Murdoch is Rupert Murdoch, head of News Corp., worldwide media tycoon. He's still Rupert Murdoch; what's changed?
FOLKENFLIK: Well, Dow Jones is a smart company about economics and the business world, obviously. They publish the Wall Street Journal. In terms of how they've handled themselves, however, they've done less well. They've performed very, very sluggishly, in fact a steep fall-off from the Internet boom to where we are now. They've been affected by a lot of the same things that have hit a lot of newspaper companies.
They also made a series of kind of business blunders along the way. They could have, for example, held on to what became CNBC, or at least a significant stake. They could have invested in things like Comcast. These are seen as opportunities that were lost for them to figure out a way to diversify.
In the meantime, the family controls about 64 percent of the voting stock, but there are a lot of other investors out there, and they're saying, hey, this is an opportunity. We can get real money. Murdoch made what seemed like a sort of preposterous offer for the company, offering two thirds over what was then the stock value for the company a month ago when he made this unsolicited bid.
INSKEEP: Well, that explains why the family might want to consider this offer, but has Murdoch himself done something to persuade the Bancrofts that he's not going to ruin the Wall Street Journal?
FOLKENFLIK: Murdoch has made some promises to insulate the paper from interference. But in the last month the family has been hoping for a white knight to pop in and make a comparable offer, a Warren Buffett or a Bill Gates, for example. It hasn't happened. In the meantime, investors are clearly signaling that this is the moment for the Bancrofts to sell. If they don't take this offer, they're not going to take anything, and that would signal that the shares would drop very much in value.
INSKEEP: Okay, David. Thanks very much.
FOLKENFLIK: You bet.
INSKEEP: NPR's David Folkenflik is in New York. He's covering the story of Rupert Murdoch's News Corporation, which will be talking with the Bancroft family, the dominant owners of Dow Jones, which controls the Wall Street Journal.