Panel to protect Journal from new owner Murdoch
Media baron Rupert Murdoch and the owners of the Wall Street Journal have approved an editorial agreement they say will protect the newspaper’s independence under its new management.
A five-person special committee will have the power to hire and fire top editors at the Journal, and those editors will have control over news decisions and spending, according to terms of the deal reached by Mr. Murdoch’s News Corp. and Dow Jones & Co. Inc., publisher of the Journal.
News Corp., which on July 31 announced that it is acquiring Dow Jones for $5.6 billion, also must consult the Journal’s managing editor before using the brand names of the newspaper or Dow Jones, the two companies said in a merger agreement filed Aug. 1 with the Securities and Exchange Commission. In addition to the Journal, Dow Jones owns a wire service, the financial weekly Barron’s and the Dow Jones Industrial Average.
A majority of the Bancroft family, which has controlled Dow Jones since 1902, agreed to be acquired by News Corp., ending a bumpy months-long courtship. Some members of the family were holding out to see if Mr. Murdoch would raise his unsolicited $60-ashare offer, while others opposed to News Corp. unsuccessfully sought additional bidders.
The deal was clinched by Mr. Murdoch’s willingness to pay the Bancroft family’s legal and advisory fees, according to the Journal, which reported that the fees could total $30 million.
News Corp. also agreed to appoint a member of the Bancroft family to its 15-person board of directors.
Dow Jones could kill the deal if a better offer comes along, although it would be liable for breakup fees of $165 million.
Analysts doubt the acquisition will face any regulatory hurdles, but Michael J. Copps, a Democratic commissioner on the Federal Communications Commission, disagreed.
“What’s good for shareholders of huge media conglomerates isn’t always what’s good for the public interest or our civic dialogue,” Mr. Copps said. “We should immedi- ately conduct a careful factual and legal analysis of the transaction to determine how it implicates specific FCC rules and our overarching statutory obligation to protect the public interest.”
Dow Jones Chief Executive Officer Richard Zannino told his staff in an Aug. 1 memo that merging with News Corp. means expansion opportunity.
Mr. Murdoch has said he plans to invest even more in building up the paper’s Washington coverage at home as well as overseas, where it competes with Pearson PLC’s Financial Times.