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Murdoch's News Corp. OKs Bid for Dow Jones
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Murdoch's News Corp. OKs Bid for Dow Jones

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Murdoch's News Corp. OKs Bid for Dow Jones
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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block.

Rupert Murdoch is on the brink of acquiring The Wall Street Journal and its parent company, Dow Jones. Members of the Bancroft family have elected to sell to Murdoch's News Corporation in sufficient numbers to seal the deal the $5 billion deal. The Bancroft family currently holds the controlling shares in Dow Jones.

And later today, News Corp.'s board formally endorse the deal.

NPR's media correspondent David Folkenflik has been watching today's development. He joins us from New York. David, you have the Bancroft family and News Corp. now both signing on to this, what has to happen for this to go through?

DAVID FOLKENFLIK: Well, what has to happen now is that the board of directors of Dow Jones were meeting as we speak - have to endorse this deal. And then they have to send it on to the general shareholders, that is the full number of people and the funds and all the investors get to vote in this, not just the controlling Bancroft family, which holds about 64 percent of the shares.

BLOCK: You know, the Bancroft family has been pretty low profile until now. But since this dib was announced, we've heard a lot about them and a lot about divisions within the family. What do you know about how these family members actually voted when it came down to it?

FOLKENFLIK: Well, it helps to think of Dow Jones as sort of separating the three pieces of a pie. There's 29 percent that are these other funds and other shareholders, it's about 7 percent held by the Ottaway family, they're dead against the deal. Other shareholders are going to be overwhelmingly in favor of the deal, because it will offer them a great premium. Bancroft family have this tradition, they're descendants of the people who've controlled this newspaper company for over a century.

Strong tradition of editorial independence, of not interfering in this company, suddenly they are offered $5 billion - or at least for the whole company their share would be about $1.2 billion - for the company, and its craved these fissures, these splits between generations, between branches of family, in fact, between nuclear units of the family, what best to do. There's been a lot of recrimination in part because the Bancroft family hasn't forced the management of Dow Jones to be more careful stewards, perhaps, of the financial fortunes.

Yesterday, there were about 28 percent it seemed that would support the move Murdoch indicated, this wasn't enough for him to press forward, that he needed a more substantial support. Today, it emerges that the numbers can be more like, at least, in the mid-30 percent from support - from the Bancroft family.

BLOCK: So what happened between yesterday and today to boost that number higher?

FOLKENFLIK: Well, it was interesting. The Denver branch of the Bancroft family, which controls about 9 percent of the vote, had been holding out not on principle but for more money. They wanted him to raise his offer from $60 a share, which already represented about a 67 percent markup over what had been worth to either 66 of $72 a share. Murdoch made clear he wouldn't do it. But what he did do was he agreed that Dow Jones could agree to pay for all of the fees, the consultants, the accountants, the lawyers that were called in to deal with all these very complicated trusts and tax issues on what it might mean to accept or, for that matter, to turn down the bid.

He said Dow Jones could take that on News Corp. and Murdoch himself, of course, would assume that debt, that means about $30 million to Bancroft family members and that was enough to sweetened the deal, got that, you know, much - not all but much of that 9 percent on board.

BLOCK: Now, why does this media tycoon, Rupert Murdoch, thinks that Dow Jones, the Wall Street Journal is worth $5 billion?

FOLKENFLIK: Well, that's a key question because the Journal, which is the core of Dow Jones has been hit very hard by a lot of the same pressures and financial issues affecting the rest of the industry. You got problems with circulation, you got problems with advertising. But there are two things going on. One is he's kicking off a new Fox business channel that would go up on cable head-to-head to CNBC. Currently Dow Jones has a deal with CNBC, but ultimately that'll lapse and he can use the Journal name to help that along.

And the second thing is that Murdoch very much likes being a player. He owns both more controversial, more charged properties such as the New York Post, Fox News, The Sun in London. But he also owns tonier things in his native Australia and in England like The Times of London, The Australian, and it gives them a place at the table from which he can pursue his business interests and also his political interests, as well.

BLOCK: And now that it looks like the deal will go through, what's the reaction in the Wall Street Journal newsroom?

FOLKENFLIK: Well, because Murdoch does have a tradition of influencing the news coverage of a lot of his properties, which is much more accepted in Great Britain and in Australia than it would be here. There's a lot of concern about this being maintaining its reputation as the place of journalistic integrity and independence that's it's always been. At the same time, there's a realization he's promising to invest more in it, in foreign coverage, in political coverage. and without somebody like him with a lot of money, their concerns might be cutbacks looming ahead.

BLOCK: Okay, thanks. NPR's David Folkenflik in New York.

FOLKENFLIK: Thanks.

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