ROBERT SIEGEL, host:
The Wall Street Journal moved a step closer today to coming under the umbrella of Rupert Murdoch's News Corporation. Sources have confirmed that Murdoch and Dow Jones, which owns the Journal, have reached an agreement in principle on how to ensure the editorial independence of the paper.
That issue had been the main sticking point in negotiations after Murdoch offered $5 billion for Dow Jones in May.
NPR's media correspondent David Folkenflik says some details still have to be worked out, but it appears that the biggest hurdle to the sale has been overcome.
DAVID FOLKENFLIK: We spoke to sources, both in the Murdoch camp and in close to the Bancroft family. It appears the proposal accepted by the Dow Jones board, sort of, negotiating committee would set up the five-person board, set up of eminent people who would not have any formal ties either to the Bancroft family of Dow Jones on one side or to Rupert Murdoch and the News Corp. on the other. And that would be a board that the editors of the newspaper could go to to resolve any complaints, any concerns, about meddling from the ownership or from Mr. Murdoch in particular. Second thing it would do is the board would have to be consulted by Murdoch in News Corp. in the appointment of any top editor at the newspaper.
SIEGEL: But we're talking about concerns in the news pages of the Wall Street Journal, I assume.
FOLKENFLIK: It's the news pages. Also, I believe the editorial board would be covered. The idea…
FOLKENFLIK: …is the non-business or the financial functions of the Wall Street Journal and of Dow Jones, which also has other financial news outlets.
SIEGEL: Well, what do you think? I mean, does it sound like that could be effective?
FOLKENFLIK: Well, that's really a tossup. I mean, the Times of London, one of the most prestigious newspapers in the United Kingdom, had somewhat similar arrangements set up in the early '80s when Murdoch purchased that. Murdoch and the News Corp. executives will say that they've respected it - the board - and that they've respected the independence. In fact, there are a host of people who said that, although he's had a lighter touch than on many of his tabloids, that Murdoch has been willing to further his both ideological and financial interests through affecting stories that appear on the paper.
SIEGEL: Let's talk about the Bancroft family, which owns the controlling shares in Dow Jones. Why did they insist on this agreement over editorial independence for the Journal?
FOLKENFLIK: Well, just as Murdoch has a tradition, you know, in Australia and U.K. and at the New York Post in America, sort of using his news outlets as vehicles for his own interests, the Bancroft family is exactly reverse, on the other side of the spectrum. They have been very hands-off. In fact, a number of the three-dozen members of Bancroft family are said to be very upset with the ideological stances of the conservative editorial pages of the Wall Street Journal, but they have never interfered.
SIEGEL: And the paper really wasn't up for sale until Murdoch made his rather extraordinary offer, no?
FOLKENFLIK: It wasn't. There are two things going on here. One is by offering so much money - $5 billion, as you said, well above the stock value at that time - Murdoch changed the financial landscape. Now, investors are expecting to get a significantly higher return in payday. The other thing is, Bancroft family, three-dozen members, it's not monolithic. And there are some particularly younger members of the family that would like to receive some of these major profits that are available.
SIEGEL: So what happens next to make this a done deal?
FOLKENFLIK: Well, the Dow Jones board took over negotiations about a week ago saying, hey, the family is not - shouldn't be negotiating head-to-head with Murdoch. But they do have to take it back to the family. They control over 60 percent of the voting stock and it's - we have yet to know what the family will offer in reply.
SIEGEL: Okay. Thank you, David.
FOLKENFLIK: You bet.
SIEGEL: David Folkenflik, NPR's media correspondent.
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