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'Marketplace' Report: Murdoch's Big Buy


Hear Marketplace's Janet Babin

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From NPR News, it's DAY TO DAY.

Rupert Murdoch and Dow Jones made it official this morning. His NewsCorp will buy Dow and the Wall Street Journal for more than $5 billion. The deal did not come easily for anyone. Some fear it has troubling implications for newspapers and for journalism.

MARKETPLACE's Janet Babin joins us now. Janet, the Bancroft family, principal shareholders in Dow Jones, had been against this, but now the family's changed its mind. Why?

JANET BABIN: Well, they've been deeply divided, Alex, over letting go of this asset, but in the end the money was just too good to pass up. Murdoch was offering $60 a share at a time when the stock was worth around $37 a share. And then he reportedly sweetened the deal at the last minute. And that was it.

CHADWICK: Well, so they sold. I guess the question is, did they sell out?

BABIN: You know, they've been criticized on both sides here. I mean, business people couldn't believe they weren't accepting this offer that would clearly benefit shareholders. And journalism advocates couldn't believe they'd sell such a prized possession to a man, you know, with a reputation for inserting his personal views into his media holdings.

I spoke with Lou Ureneck about this. He chairs the journalism department at Boston University, and he had an op-ed this morning in the Boston Globe. He says, you know, this was a fight between journalism and the market, and the market won, but not without the family putting up a good fight. And he says they should be commended for that. Ureneck says this acquisition will be the crown jewel for Murdoch, but it's a foreboding sign for the newspaper business, and maybe even for democracy itself.

Professor LOU URENECK (Boston University): We need newspapers in order to sustain the kind of government that we have here in this country. They have to be viewed at some level as social capital, and they can't be treated entirely as commodities that are bought and sold on financial markets. Now, how is this inserted into the system that we live with? That's a very difficult question.

CHADWICK: That's a very serious kind of way to look at this, and the question of what happens to newspapers with readership and stock prices sliding.

BABIN: Yeah. And Alex, you know, no one really knows what's going to happen. But everyone I spoke to agrees that this acquisition changes everything. It's even going to change business television. I spoke with Sarah Ellison. She covered Murdoch's bid for Dow Jones for the Wall Street Journal and she says reporters there expect that Murdoch will be now retooling the Fox Business Channel when NewsCorp launches its new cable business channel in October.

Ms. SARAH ELLISON (Wall Street Journal): People expect that they'll go on the Fox Business Channel or whatever the new channel is called. Now we have a relationship with CNBC and there's an exclusive content-sharing agreement with CNBC. So there's going to have to be some contract negotiation.

BABIN: So Ellison says she has gotten a flood of e-mails from readers who say they're going to cancel their subscriptions for the Journal. But of course the publishers are trying to assure readers that they're still going to get accuracy and fairness.

CHADWICK: Okay. Thank you, Janet. Janet Babin of Public Radio's daily business show MARKETPLACE, produced by American Public Media.

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