Family Vote: Take $5 Billion or Keep WSJ?
Two very different families hold the keys to the Wall Street Journal's future.
July 18, 2007 — -- The fate of the Wall Street Journal and its parent company Dow Jones is in the hands of the family that has long controlled -- but from a distance -- the bastion of American financial news.
The Dow Jones board voted late Tuesday night to sell the company to Rupert Murdoch's News Corp. for $5 billion. The Bancroft family, which controls the majority of the voting shares of the company, will meet Monday possibly to decide on the sale, a family spokesman told ABC News.
The battle over the paper's future is essentially a tale of two families. They both have power and influence over the world's media, but that's where the similarities end.
Rupert Murdoch, head of one of those families, has been trying for more than two months to buy out the holdings of the Bancrofts.
Analysts say Murdoch is anxious to own the Journal brand, which he will likely use after he launches a new business television network scheduled to go on the air in October. The operation, now named Fox Business Network, would likely become the Wall Street Journal Channel in what is likely to be a hard-fought battle with biz-net CNBC for ratings. Dow Jones also has something else Murdoch wants -- online news outlets that users are willing to pay to gain access to.
And the Dow Jones empire was available at a bargain price. Shares were languishing in the $30 range because Dow Jones was an low-growth, old-line media company facing increasing economic pressures. The national media company's market cap was less than $3 billion, the kind of money Murdoch's global empire could shell out quite easily.
The Bancroft family initially rejected News Corps.' bid but later opened up to it after Murdoch agreed to protect the editorial independence of Dow Jones outlets with an outside board. Murdoch's conservative politics and aggressive management style have earned him a reputation as being willing to toss objectivity to the side when money or power are to be had. The outside board, which would have control over hiring and firing the top editorial leaders at the various properties, has quelled some of the early concerns over the bid.
