Panel to pro­tect Jour­nal from new owner Mur­doch

The Washington Times Weekly - - From Page One - By Kara Row­land

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.

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