Rupert Murdoch Wins Wall St. Journal; Cable Net, Resignations Next
Despite the media frenzy and open paranoia about his bid, Murdoch is poised to win bid for Americaâ€™s largest business newspaper, which he will leverage to launch a new cable business channel this fall.
By Alex Ben Block for Hollywood Today- Hollywood Today Senior Columnist Alex Ben Block is the author of â€œOutfoxed: The Inside Story of Americaâ€™s Fourth Television Network.â€
HOLLYWOOD, CA. (rushprnews) August 1, 2007â€“ Ready for the Dow Jones Fox Average on the nightly news? It could happen now that Rupert Murdoch is set to achieve his longtime dream of owning the Wall Street Journal, Americaâ€™s largest and best known business newspaper and website.
The Journal itself reported Tuesday that enough shares owned by the battling Bancroft family will be pledged to the $5 billion bid by News Corp for the Journalâ€™s parent, Dow Jones, to give Murdoch the shares he needs to do the deal. As this column predicted back on May 7 when the offer was first made public, Murdoch has kept a steady hand on the wheel in the face of public paranoia, media frenzy and hand wringing about journalistic integrity. Through it all Murdoch has refused to raise his generous offer, as some Bancroft family members demanded, while doing whatever it took to succeed.
For more news and a peek at whatâ€™s in store for The Journal under Murdoch rule:Â See Video: Future of Murdoch WSJ Takeover/, See HT Murdoch/WSJ Article 7/25 , See HT Murdoch/WSJ Article 5/7
As part of the deal, Murdoch agreed to the creation of an independent board which has oversight to insure that the Journalâ€™s integrity is maintained. How much that board will be able to do, and what happens if there is a breach, remain unclear. One thing for sure is that Murdoch will move quickly to put his personal stamp on Dow Jones.
The only thing remaining to make it official is a vote by the remaining minority public shareholders of Dow Jones, most of whom are expected to happily tender their shares for $60 each, about twice their value before Murdochâ€™s offer. Dow Jones shares sold for $34.63 on April 30.
Murdoch, who grew up on newspapers in his native Australia, had said previously that if successful, he would personally move into the Journal newsroom to take a hands on role for at least the first six months. That is likely to include the installation of new managers and journalists who will be happy to carry out the Murdoch mandate.
There will be a flurry of resignations as some reporters move elsewhere. If the pattern established when Murdoch took over major publications in Australia and the U.K. follows, as is likely, within a few months there will be new faces in the newsroom and a quick end to dissention and controversy. Most of the Journal sales people have already said they welcome Murdoch, who they expect will shake up the staid, tradition bound, and somewhat old fashioned way that Dow Jones and the Journal have long done business.
The acquisition of the Journal will also be a blow to CNBC and a boon for the fledgling Fox Business Channel, scheduled to go on air this fall. CNBC and Bloomberg have been the only serious players in the small niche that has been business news. Since many viewers are in offices during the day, both sell ads based more on who they think is watching than an audience that can be found.
CNBC has a long-term agreement for WSJ reporters to cooperate on stories and make appearances. That is likely to be strained quickly.
The economics of Murdochâ€™s bid have always made sense only to him and his company. It is by joining the power of the Journal, its brand and promotional pages with the new business cable channel that tremendous new value will be created. For Murdoch one and one will add up to three, as overnight News Corp. will have a new asset valued in the hundreds of millions.
While the value of consumer papers continues to fall, the business press is different. Business people always need good information and will pay for it, however it is delivered. That is one reason the Journals web site is one of the few that is able to charge a subscription fee for usage.
Murdoch will now have the opportunity, along with his top manager Roger Ailes, to do to cable business news what the Fox News Channel has done to mainstream news â€“ dominating ratings and changing the way the news is presented.
While CNN, CNBC and the evening news on all three networks is about serving everyone, Fox news has been more targeted. In the age of more personal media, with news available from many sources, this specialized approach has succeeded. The older while males who watch Fox News have proven to be a very loyal audience.
The Bancroft family are the descendents of founders of the Journal. They are a fractious family, divided into at least three separate camps. While some members continue to hold out against Murdoch, the Journal reported that members with control of at least 38 percent of a special class of stock will vote with Murdoch, which is more than he needs to buy the company.
Some Bancroftâ€™s said that by not taking a more active role in managing Dow Jones, the family had brought this day on themselves. Murdoch certainly will take a very active role, and will use the power it provides to build his businesses, increase his power in Washington and extend his interests around the globe.
It initially appeared the Bancroftâ€™s would rebuff Murdochâ€™s bid. As recently as yesterday, News Corp. itself said the deal was in doubt. However, in the end, enough of the heirs put up a white flag and agreed to sell to give Murdoch control over the Journal, which he has coveted for many years.
Hollywood Today Senior Columnist Alex Ben Block is the author of â€œOutfoxed: The Inside Story of Americaâ€™s Fourth Television Network.â€