July 17, 2007
Air Of Inevitability To Murdoch Takeover Of Dow
The full board of Dow Jones & Co. will vote on Rupert Murdoch's aggressive takeover bid tonight, and despite the Bancroft family's valiant attempts to run as fast as possible from the $5 billion offer, the sale looks like a done deal.
The Wall Street Journal, the Tiffany property of the company and the center of the Murdoch-Bancroft dispute, reports that the parties had reached a tentative deal, which will be put to a final vote later today. A source close to the negotiations says the outcome is still "too close to call" (subscription). But absent competitive rival offers, it's unlikely the answer will be no.
Many Beltway insiders give credit to the Journal as the country's most respected daily with a conservative editorial board. And in an environment seemingly dominated by relatively liberal ed boards, the church-state separation between the Journal's newsroom and its board, run by the highly respected Paul Gigot, could be reason to give Dow its due.
So it's little surprise that much of the paper's staff has joined the Bancrofts, who have 64 percent voting control over Dow, in resisting the Australian-American media mogul's courtship.
The reason, of course, is FOX News, Murdoch's answer to what he considered a liberal bent in American TV journalism. (In the interest of full disclosure: The author of this post used to be the Supreme Court correspondent for FOXNews.com.) The cable news network, which made its name during the Clinton-Lewinsky scandal, is considered baldly conservative by its many critics.
Murdoch's reputation for agenda-pushing through his media properties has set off a barricade-the-doors mentality (subscription) within Dow. But it's either Murdoch or the unemployment line for many; the Journal is bleeding money in a very depressing environment for newspapers, and Dow has no other way to bring its value close to the $60-per-share Murdoch is offering.
Once the ink is dried, the Journal will be the jewel in Murdoch's American crown. He has repeatedly sought to assure the Bancrofts that the last thing he'd want is to disrupt a winning formula, and the negotiations have been prolonged because the family wants his promise on paper.
Most of Dow's editorial leadership, including Gigot and managing editor Marcus Brauchli, would remain in place after a takeover. The parties have also agreed to special protections from News Corp. interference, such as an independent dispute arbitration board.
Even if Murdoch keeps his pledge to leave the editorial side of the Journal alone, Dow will face a perception problem. The Journal got a taste of this two years ago, when its PBS offshoot, "The Journal Editorial Report," was pulled off the air.
The show is now carried on FOX News Channel.
Murdoch has never hidden his conservative leanings, but doesn't appear to be ruled by them in making business decisions for his media conglomerate. His Sky News Network, a kind of British CNN, is well respected as nonpartisan, as is the London Times. He's also made political allies of former British Prime Minister Tony Blair and both former President Bill Clinton and Sen. Hillary Rodham Clinton.
Some media observers sense that Murdoch is embarking on a corporate makeover in a nod to changing realities. Like other media moguls, he jumped into the dot-com boom in the 1990s. Unlike most, he jumped out after getting burned. His latest foray into the online world -- the purchase of MySpace being most emblematic -- is both a late start and do-over.
As for FOX News Channel, there's an argument to be made that it's lost its mooring of late. For one, ratings are down, which media observers have attributed to President Bush's declining fortunes. But it's still No. 1 in cable news, which is why the Democratic top tier's boycott of its debates matter.
FOX has long insisted that its format is akin to a newspaper: hard news during the day, opinion (Bill O'Reilly, Sean Hannity) in the evening. There might be something to that; a 2005 UCLA study found that its evening newscast, "Special Report With Brit Hume," although slightly right of the average voter, was tied with the likes of "NewsHour With Jim Lehrer" as the most centrist TV news outlets (CNN and ABC also had programs in that category). Most of the rest of the field was found to lean left.
This might come as cold comfort to Dow's nervous employees. But here's something that really ought to worry them: As newspapers fight to stay afloat, celebrity-centered tabloids continue to proliferate. Murdoch's media empire doesn't lack for those money-making outlets. The Journal was one of the few national newspapers to mostly skirt the Paris Hilton saga. But if Paris means money, can that discipline last?
The London Guardian has been on Murdoch's trail for years.
Posted at 4:32 PM
Posted to:
Dow Jones & Co., FOX News, Media
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