When last we checked in on the players in the New Corporation–Dow Jones drama — the star-crossed Bancroft family, their Wall Street Journal, the interloping scamp Rupert Murdoch, and the thousands of field hands who fear they'll be sold down the river if Murdoch gets his hands on the thing — a British business mag was reporting that a purchase deal was essentially done and Dow Jones spokesmen were saying it wasn't. Where do things stand today? The Times reports that the editor of that British biz mag insists his story is true; the Journal reports that Dow Jones is still desperately seeking other suitors, including Ron Burkle, though perhaps only as a way to get Rupe to raise his offer; senior Journal editors tell the Times a lot of Journal reporters will lose their jobs if no deal happens; one longtime big-shot editor left the paper for Business Week; and Norm Pearlstine, the former Journal managing editor who went on to run Time Inc., says in the L.A. Times that Murdoch should encourage the Journal to cover News Corp. aggressively. In other words, nothing has actually changed.
Expert on Murdoch Insisted Dow Jones Deal Was Done [NYT]
Dow Jones Makes Late Push to Find Other Buyers [WSJ]
Job Cuts Averted as Bid for Journal Stays Open [NYT]
Journal Editor to Join a Magazine [NYT]
You've Got to Cover Yourself [LAT]
Even before Rupert Murdoch declared his intentions, The Wall Street Journal was already a bit under siege. The paper is full of talent that other publications want, and greedy rival editors — from Business Week, Forbes, Fortune, Portfolio, Newsweek, Time, the Times — are drawing up their lists of Journalistas to entice away. After the jump, a speculative shopping list.
A British mag called The Business is confidently reporting today that "Rupert Murdoch has succeeded with his $5 billion bid for Dow Jones, owners of the Wall Street Journal, according to sources acting for the Dow Jones board." The Business says the price is $60 per share, that the deal includes the legally enforceable editorial-integrity agreement reached last week, that the Bancrofts are all onboard, and that the deal will be announced next week. Just one little problem. Dow Jones says none of it is true:
A spokeswoman for Dow Jones said the report from The Business was "false." She said there has been "no change" in ongoing negotiations on the takeover offer from News Corp. (NWS). "The only agreement is on editorial independence," said the spokeswoman, Andrea Grinbaum.
So Rupert Murdoch made a bid for Dow Jones. And he said he'd create an independent oversight board for The Wall Street Journal like he did for the London Times when he bought it, which can veto News Corp.'s top-level hiring decisions. And the Bancrofts were miffed about that. The London board wasn't strong enough. It couldn't protect their paper enough. Hell, it couldn't even protect Harry Evans. They wanted a strong, all-powerful board. They wanted Murdoch's money, but they didn't want him hurting their newspaper. Murdoch, however, rejected their proposal. He didn't want an all-powerful outside board. He didn't even offer a board as powerful as London's. "They can't sell their company and still control it — that's not how it works," he said to Time magazine. "I'm sorry!" And now today the Times reports a deal has been reached on an oversight board. It will, after all that, be much like London's.
Still Another View of Role of Panel Proposed for Wall St. Journal [NYT]
So it's been, what, two or three weeks now of tense negotiations over the future of Dow Jones. Of hand-wringing over what News Corp. might do to the company. Of Bancroftian efforts to retain some control of their company, even if they sell it. Of concerns that any promises Murdoch makes about editorial independence will be totally abrogated. Of Murdoch's assurances that really, honestly, genuinely he'll be respectful of the paper, just like he's been of the Times in London. And then the new Time magazine comes out, with ol' Rupe on the cover and this opening paragraph:
"They're taking five billion dollars out of me and want to keep control," Rupert Murdoch was saying into the phone, "in an industry in crisis! They can't sell their company and still control it — that's not how it works. I'm sorry!"
You have to respect the old Aussie, really. How many people have the balls to admit they'll break their promises before the promise is even agreed to?
Exclusive: Rupert Murdoch Speaks [Time]
The Times has the second installment of its Rupert Murdoch–is–a–bad–bad–man series today, this time focusing on his dealings with China and featuring a catchy new rubric: "The Murdochracy." The piece checks in at 2,800 words, and it recaps what you basically already know about Mr. M.: that he's constantly been willing to make concessions to the Chinese government to gain access to the Chinese market. We were going to use the magic of Microsoft Word to AutoSummarize this installment, too, but there's actually one fairly fascinating bit we didn't want to lose to the summation.
The Times' front-page, 3,900–word, reportedly Jill Abramson-edited investigation of Rupert Murdoch in ten sentences, thanks to Microsoft Word's AutoSummary:
Mr. Murdoch’s Fox stations reached nearly 39 percent, meaning he would have to sell some.
A strike force of Mr. Murdoch’s lobbyists joined other media companies in working on the issue. It turns out he had a business connection to Mr. Murdoch. Political Relations
Over time, Mr. Murdoch has shown an ability to adapt to changing political winds. Mr. Murdoch’s trajectory in the United States has been similar. Mr. Chernin and Mr. Murdoch publicly denied making the threat.
Media Ownership Rules
It was a fortunate time for Mr. Murdoch, whose business interests and political ideology were in ascendancy.
Ms. Salamon initially dismissed Mr. Murdoch.
Spelunking in the Clintons' financial disclosures brings all sorts of rewards. First came the mini-skirmish about Bill's lucrative teleconferencing with Hong Kong on an anniversary of 9/11, defused with an instant Clintonian classic ("It was 9/10 where I was"). Now there's a fascinating nugget in Bill and Hillary's recently dissolved blind trust, which the couple just divested to avoid conflicts of interest. We'll say! One of the trust's holdings was stock in News Corp. This makes Hillary a (admittedly unaware) shareholder in the Post and Fox News — a fact akin to, say, Daniel Goldstein discovering he's invested in Forest City Ratner. But it's too bad she got out when she did — has a Democrat ever owned The Wall Street Journal?
Clintons' Trust Invested in News Corp. and Berkshire [Bloomberg]
So how much exactly does the Bancroft family dislike, distrust, and generally feel icky about Rupert Murdoch? Last week the family's lawyers drafted a proposal to protect the paper's editorial independence in the event of a sale, and the family rejected it as insufficiently strong. Tim Rutten at the L.A. Times got his hands on the plan, which he calls "an extraordinary document — unusual in the severity of its prescriptions; stunning in its unspoken assumption of Murdoch's reflexive bad faith." So what were the proposals? A few statements of principle — "the clear separation of news and opinion," "the freedom to report the news free from fear or favor and to express opinions critical of governmental agencies, interest groups, management, customers and others with a stake in the success of the company," and the like — combined with a board-of-directors subcommittee called the "Special Committee on Editorial and Journalistic Independence and Integrity," basically charged with protecting those principles.
"Constructive" was the word coming out of yesterday's meeting between Rupert Murdoch and the Bancroft family. In such cases, "constructive" usually means the sides haven't agreed on a single thing but will talk again. We know that the conversation ran far longer than expected, about four hours (good news for Murdoch), and stalled over the issue of editorial independence (good news for wary Wall Street Journal writers). See, the Bancrofts want the Journal's staff to report to a family-run board completely outside the News Corp. structure. Murdoch finds the idea unworkable and counterproposed an "independent" governing board like the one he set up for the London Times when he bought it in 1981. Of course, upon buying the Times, Rupe wasted no time before muscling out its editor, board or no board.
• Now, finally, inevitably, the Bancroft family has announced it would "consider" selling Dow Jones. The rest is hemming and hedging, but do click through for the most ridiculously villainous photo of Murdoch the Times has ever run. [NYT]
• Leroy Comria, a city councilman, has been issued police protection after another councilman's aide kinda sorta threatened to assassinate him. Why? Because Comria wouldn't vote to rename a street in honor of Black Nationalist Sonny Carson. [NYP]
• While Bloomberg wants to increase the city's real-estate tax cut from 5 to 8.5 percent, renters are screwed again — looks like the Christine Quinn–proposed $300 refund to the city tenants won't happen. [NYDN]
• Columbia University, squeezed by the AG's office over an alleged violation of student-loan laws, denies any wrongdoing — but agrees to pay up to a million dollars nonetheless. [amNY]
• And, in a possible first, the Hotel Chelsea Blog has inspired a documentary, Living With Legends. The last outpost of bohemia, gentrification, whither New York, blah blah. [WNBC]
By now, everyone knows that the key to Rupert Murdoch's bid for Dow Jones — the synergistic centerpiece that makes the whole thing make sense — is his plan to integrate the Wall Street Journal with his new Fox Business Channel. But let's step back and learn a little more about this forthcoming CNBC rival. A report in Fortune sheds some timely light on the cable channel, and, as it turns out, the thing looks surprisingly, um, budget-conscious. Insiders tell Fortune that News Corp. has set aside $100 million in initial capital. For comparison, that's a quarter of the sum Murdoch put up for Fox News — and that was more than a decade ago. Talent-wise, News Corp. appears to be hiring about 300 people, also a very modest number. Of course, one can understand Rupe's wariness: It's a field littered with failures (CNNfn and the Financial News Network come to mind). But Murdoch has gone up against tough odds before — but you know the Bancrofts will be just thrilled to learn their crown jewel is set to be paired with a cubic zirconium.
A Cable Network On a Shoestring [Fortune via CNNMoney]
Maybe John Kerry's right, and environmentalism truly isn't a partisan issue anymore. How else to explain the latest passenger on the bandwagon, Rupert Murdoch, who has just promised to take his News Corporation carbon-neutral within four years? An ultracheery news item — in the Post, of course — breaks down the massive undertaking into smaller initiatives. For instance, the 20th Century Fox lot will switch to solar-powered golf carts. The 24 crew will use biodiesel-powered generators for outdoor scenes. (That must well complement the show's commitment to recycling: How many times has Jack gone rogue? CTU been invaded? Vice-president conspired?) Apparently this should go a long way toward negating the 641,150 tons of carbon News Corp. belched out in 2006 alone. But environmentally friendly explosions aside, we can't help but notice one little problem.
• Gordon Gekko is back! Michael Douglas will reprise his Oscar-winning Wall Street role, only this time as a hedge-fund magnate. [NYT]
• James Simons tops a list of Wall Street's highest earners. [Forbes]
• Two of Rudy Giuliani's firms represented both a creditor and a debtor in a bankruptcy case, a possible conflict of interest that was not disclosed to the judge. [WSJ]
• At this year's 2007 Robin Hood benefit, philanthropic hedge funders paid $400,000 to sing a song with Aerosmith, and $1.3 million for dinner with Mario Batali. [NYT]
• Hafiz Naseem, a junior investment banker at Credit Suisse, was charged with insider trading after he tipped off associates in Pakistan about deals, including the TXU buyout, before they were made public. [NYT]
• Google is the No.1 preferred employer for MBA students, with more traditional companies McKinsey and Goldman taking the next two slots. [Fortune via CNNMoney]
Rupert Murdoch has today gone to — of all places — the Times to make a very public case for his Wall Street Journal bid. We were sold on the story by its photo alone, of Rupe luxuriating on a white couch — sorry, a "taupe sofa," according to Richard Siklos and Andrew Ross Sorkin's account — but it got even better as we read on. The mogul makes a number of specific points about how he'd improve the paper. He's bored by some long articles and wants to take the Saturday Journal glossy to compete with the Times Magazine. He'd like to see more coverage of Washington. He reads but doesn't quite "get" tech columnist Walt Mossberg. Then there are the Rupert classics: globalize and synergize. Television! India! China! (The Great Wall Street Journal?) Those ideas of change aside, Murdoch swears that he "won't meddle" with the editorial side or cut staff. Unless he will: "I'm not saying it's going to be a holiday camp for everybody," he says. The paper's union rep is already organizing an e-mail drive asking the Bancrofts to stay strong.
Murdoch on Owning the Wall Street Journal [NYT]
• News Corp. made an unsolicited offer of $60 a share for Dow Jones today, sending the share price up 58 percent on the news before trading was suspended. [CNBC]
• GQ auctioned off a one-month internship in its marketing department on eBay. The winner paid $30,200 likely more than a marketing assistant makes in a year. [eBay via Media Mob/NYO]
• Contrarian Christopher Hitchens called the Virginia Tech shootings a "non-story" at the annual ASME board meeting yesterday. [Fishbowl NY/Mediabistro]
At the McGraw-Hill Media Summit yesterday, Rupert Murdoch confirmed that his Fox Business Channel will debut in the fall of this year, and he explained how it will differ from its GE-owned competition, CNBC: It will be more restrained and responsible. "They leap on every scandal," he said of CNBC. Murdoch's New York Post, for example, today displayed News Corp.'s vaunted corporate restraint in the face of scandal. "Anna Nicole Mystery: Was It Murder?" asks its front page, soberly. — Lori FradkinNews Corp. Plans Fox Business Channel This Fall [AP via USAT]
News Corp. has just posted its figures for the latest quarter, and ouch. The profits at Rupert Murdoch's behemoth have dropped 24 percent compared to last year. The movie division is doing splendidly — Fox's earnings jumped 57 percent, with a good chunk of the $470 million take attributed to the ultraprofitable Borat. The problems are on the TV end: Broadcast profits are down. Then there's MyNetworkTV, a blatantly doomed "mini-network" that sounds scarily inspired by Murdoch's purchase of MySpace (another costly exercise with no clear yield in sight). Even the man himself admits MyNetwork has performed "far below expectations." No word on how Rupe's quixotic devotion to the Post is affecting the bottom line; our uneducated guess is, however, it's nothing a mere twinge of Sasha Baron Cohen's mustache can't erase.
News Corp. Quarterly Profit Declined 24% [Crain's]
Last week we learned that recently deposed book editor Judith Regan kept all sorts of weird things in her office, including clothes, her kids' report cards, and an enormous portrait of herself. In this week's New York, Vanessa Grigoriadis tells us so much more about the woman:
1. While all the O.J.-Jews-firing saga was going on, Regan was on a 21-day liquid fast — no chewing allowed! — that allowed her to eat only an "infusion of berry drinks, enzyme shots, hot tea, live juice, and a once-a-day treat of soup — a mélange of carrots, sweet potatoes, and spinach puréed in the Cuisinart."