The Dow Jones Deal Charges Ahead (Part Deux)

I hate to say "I told you so," but it seems that my post yesterday was right. The stock is up 11% this morning, as somehow the deal that seemed to be crumbling yesterday is fast moving to completion.

Remember: what Rupert wants, Rupert gets.

CNBC's David Faber reports as follows:




© 2007 Gary Weiss. All rights reserved.



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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

The Dow Jones Deal Charges Ahead

This just appeared on the Online Journal:

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News Corp. Says It's 'Highly Unlikely'
To Buy Dow Jones at Current Count

By MARTIN PEERS
July 30, 2007 2:26 p.m.

News Corp. Corp. is "highly unlikely" to proceed with its $5 billion offer for Dow Jones & Co. if its bid doesn't get more support from the Bancroft family than has currently emerged, a News Corp. spokesman said.

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The stock is down on this news.

Maybe I'm cynical, but I interpret this to mean that the Dow Jones deal is charging ahead.

What Rupert wants, Rupert gets.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Why the Merger Matters

Dean Starkman of CJR Daily has an obituary today-- a premature but good one -- on the demise of long form journalism at the Wall Street Journal under Rupert Murdoch.

He's right, but I think his essay would be more on target if they included all the Dow Jones publications, not just the Journal. It sometimes seems as if Barron's and MarketWatch.com are simply ignored by media writers. Long-form journalism has thrived there too, you know.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

More on the Fate of Barron's Under Murdoch

The New York Times today has an article on the fate of Barron's under the almost (but not quite) certain News Corp. acquisition. This was a good and thorough article, as evidenced by the fact that it quoted a blog item on the conspicuous absence of Barron's from the debate over the Murdoch bid.

But I have a quibble with the reporter's analysis.

After observing that Barron's editors are not covered by the "editorial independence safeguards" to which both parties agreed, the Times says:

Ultimately, market forces may be a better safeguard than special agreements. The publication is doing very well, and Mr. Murdoch is first and foremost a smart businessman — as recognized by Barron’s list in March of the top 30 chief executives.

I think that misses the point. No one is suggesting that Barron's is going to be dismembered. Its staff may even be beefed up. However, I think there is a good chance that Barron's editorial product will be the first true outpost of Murdoch in the Dow empire.

That's also likely for MarketWatch, is similarly is not covered by the agreement.

The Bancroft family is meeting today. Given the pressures being brought to bear, I'd say the chances of Dow Jones surviving as an independent entity are fast evaporating. R.I.P.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Is Dow Jones at the 'USS Missouri' Just Yet?

I know, I know, I've said in the past that Rupert Murdoch's acquisition of Dow Jones is a foregone conclusion. I've illustrated that point with old photos of the Japanese surrender on the USS Missouri, in my usual understated way.

Still, the Wall Street Journal article today leaves me wondering if the long-awaited Unconditional Surrender is actually happening.

Yes, the board of directors last night voted to recommend the merger.

Yes, the votes seem to be there.

But then we get the following in the Journal article today:

As of yesterday afternoon two of the company's family directors were actively engaged in pursuing alternatives to Mr. Murdoch, according to people familiar with the matter. Christopher Bancroft has been talking to Internet entrepreneur Brad Greenspan about a proposal to buy a portion of the company. Mr. Greenspan, who has talked to other family members, was working on a more detailed proposal to send to Dow Jones representatives yesterday and is looking for investors, according to a person familiar with the matter. Mr. Greenspan is working with advisers at New York firm Dinosaur Securities.

I know, this is desperate and probably doomed to failure. But...... I still wonder if we are at that "USS Missouri moment" just yet.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Did Rupert Murdoch Buy Trent Lott?

The New York Times public editor, Clark Hoyt, has an analysis of the Times's two-part examination of the Rupert Murdoch financial empire. I thought articles were damn good, but I was underwhelmed by this: the Times suggested, without exactly saying so, that Murdoch bought Trent Lott by paying him a book advance.

The Times, Hoyt recalls,

said that Murdoch was in danger of losing a part of his media empire in 2003 as Congress moved to limit the television holdings of any one company. Senator Trent Lott, a Mississippi Republican, provided a crucial vote as Congress raised the cap to just what Murdoch needed to keep all his stations, the newspaper said. Months earlier, Lott had received a $250,000 advance from HarperCollins, Murdoch’s publishing house, for a memoir titled “Herding Cats.”

The Times quoted a News Corp. spokesman as saying the purchase was coincidental. Hoyt opines:

Was The Times unfair to report the advance and the vote the way it did? I don’t think so, because I don’t think the paper said Lott exchanged his vote for the advance. It said that Murdoch’s style is to cultivate relationships with those in a position to help his interests, and this was a good example.

But where's the evidence that Murdoch was involved in the book deal at all?

I agree that the advance gave Lott a big conflict of interest. However, I think it's reaching to imply that this was some kind of payoff or attempt at influence-purchasing. At least that was my reading of the Times article. It struck me as an unfair implication. Lott, however, should have been far more sensitive to the conflict of interest inherent in signing a book deal with a News Corp. subsidiary.

I know a teeny bit about the publishing world, and can tell you that this kind of advance was and is not unusual for a book by a major politician. It surely not the kind of mega-advance that would require approval of the CEO of the parent company.

Now, if that advance was paid for a coloring book by Lott's grandson, it would be a different matter. Then I would smell "payoff."

Hey, I'm as upset with the Murdoch takeover bid for Dow Jones as the next media guy, but let's not go overboard.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Dow Jones Union, Unhappy With Frying Pan, Covets the Fire

I have great respect for the Dow Jones employees union, and used to be somewhat active in it during my time at Dow Jones in early Eighties. But I really think that the people running that union have taken leave of their senses.

Today comes word that the Dow Jones board met with a possible alternative to the dread Rupert Murdoch -- "Internet entrepreneur Brad Greenspan and supermarket mogul Ron Burkle" -- according to the usual "people familiar with the matter" quoted by the Wall Street Journal today.

What's grotesque is that these two individuals, who could very easily be far worse to the Wall Street Journal and the other properties than Murdoch ever could be, were brought to the table by the union representing Dow Jones editorial employees.

That is nothing short of amazing. Does the union, the Independent Assn. of Publishers Employees, have any idea what a Journal run by guys like Burkle and Greenspan would be like? I don't, and I shudder to think. As Peter Kann, the ex-Journal managing editor, told the Journal today:

, , , if the family is going to sell I see no point in pursuing industrial conglomerates, Internet entrepreneurs, supermarket magnates and real-estate developers. None know anything at all about journalism. As to Mr. Murdoch, at least he loves newspapers, presumably would invest in the WSJ and Dow Jones, and would seem to have little incentive to tarnish a trophy he has coveted for so long.

If IAPE wants to preserve the editorial independence of Dow Jones, it needs to oppose any buyer, not just any buyer whose name begins with "Rupert." This "anything but Rupert" strategy could very easily backfire, when (not if, when) the post-takeover layoffs begin.

If the person performing the layoffs is a supermarket or a vitamin or an Internet or a ladies-corset magnate, he could simply say, "I have to do this so that I could afford to save your blessed company from Rupert Murdoch."

Perhaps IAPE should take a train ride to Philadelphia one of these days, and think about what happens when amateurs buy newspapers. After the Philadelphia Inquirer was sold to local entrepreneurs, the aftermath included advertisements on the front page and plastering the name of a bank across the business section.

© 2007 Gary Weiss. All rights reserved.



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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

CJR Parses the 'Anonymice'

CJR Daily's Dean Starkman produces yet another smart article (the third, or maybe fourth in a row) in the Audit section, correctly analyzing the latest turn of the screw in the Dow Jones-Rupert Murdoch takeover struggle.

A New York Times article on Monday quoted an unnamed source at Dow Jones as saying that the Murdoch merger was delaying layoffs at the Wall Street Journal.

Starkman observes as follows:

I know it's subtle, but let me translate: Newsroom, stop opposing the sale or you'll lose your jobs, and then where will you be? Without a job. And then how will you feel? Bad, right?

. . . Audit Readers, remember what I told you: Top DJ executives and editors now have powerful incentives to favor the sale. Readers interested in the long-term health of the business press shouldn't care about executive severance packages, editors' guaranteed jobs, reporters' unguaranteed jobs, the value of options enhanced by the Murdoch offer—or anything, really, other than how best to preserve a vital information source.

Glad to see such spot-on reporting in CJR Daily's Audit section, which is emerging from a lengthy funk and is far improved.

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Rupert's Bronx Foray

The New York Times reports today that Rupert Murdoch's News. Corp. has quietly bought two small weeklies in the Bronc.

This is an odd development, until viewed in conjunction with his 2006 acquisition of community newspapers in the borough of Queens, and his bid for Dow Jones -- which would give him the Ottaway newspaper group.

This could be of no major consequence, or it could mean that Murdoch aims to significantly increase his holdings of newspapers in smaller markets. Acquisition of Ottaway would give him papers in markets like Middletown, New York. Small-market papers have monopoly status and, sometimes, can be virtual money machines.

Ottaway is one of the better small chains in the country, but many newspaper chains are simply dreadful. So its hard to get too upset about a Murdoch foray into a segment of the newspaper business that can't get much worse.

© 2007 Gary Weiss. All rights reserved.


-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Whither Barron's in the News Corp. Empire?

One essential element has not been mentioned in the tussle between Dow Jones and Rupert Murdoch is the fate of the prestigious, market-moving, influential Barron's financial weekly.

That absence stood out like a sore thumb in the "agreement in principle" between Dow Jones and News Corp., anticipating the all but inevitable takeover.

The text was posted here last night.

Note that this agreement is narrowly constructed to cover just the Wall Street Journal and the Dow Jones news wires. Barron's is not mentioned, and has been ignored in the public back-and-forth over editorial integrity.

Under this agreement, the editor of Barron's can be replaced immediately, and this publication could immediately be used as a showpiece for News Corp. staffers and editorials. Its staffers, if not covered by the existing CNBC deal, could be immediately utilized by the new Fox business news channel.

Or at least, that's what I would do if I were Rupert Murdoch. I'd put one of my own people in charge of Barron's ASAP.

I wonder if this omission is a reflection of the lack of importance given to Barron's by both sides.

Or is it a reflection of what has been widely known for some time -- that the management of Dow Jones is grievously incompetent?

If so, we in the media who are watching this deal are not any better. Apparently nobody has given the fate of Barron's any thought. Remember that this is not a stock-touting newsletter. It is a respectable, highly reputed investment journal with a reputation for hard-hitting investigative reporting. (Full disclosure: I used to work there in the early eighties.)

In the media coverage of the Murdoch takeover, Barron's usually gets mentioned only in an offhand fashion as part of the Dow Jones organization. It has otherwise been overlooked, and nobody has noticed that it is not covered by the management-employment guarantees and editorial-independence strictures that have been discussed.

Dean Starkman of CJR Daily's Audit section says that the News Corp. "can't cover" the U.S. business story, and details why in an article yesterday. If there is any validity to that point of view, it certainly applies to Barron's as much as it does the Wall Street Journal. Yet the media has ignored this whole aspect of the takeover as much as the Dow Jones board.

Dean says the media has done a "terrific job" covering this story, but I am not so sure.

© 2007 Gary Weiss. All rights reserved.

-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.