Rupert Murdoch almost seems to be living up to the worst fears many had when made his bid for Dow Jones. Almost.
He’s been “flexing his muscles” by calling Wall Street Journal reporters, according to the Los Angeles Times. At least three reporters have had calls for him.
So what has prompted Murdoch’s calls? Does he want more favorable coverage of China? More “fair and balanced” Fox New Channel style reporting? A five-star review for the Simpson’s Movie?
Not quite. It seems that what Murdoch has been doing is attempting to keep the reporting staff of the Journal intact. The three reporters he’s called were considering leaving the Journal and Murdoch has asked them to stay.
“Murdoch, who has been vacationing in the Mediterranean in recent days, made the calls to the reporters from his yacht, the Rosehearty, named for the Murdoch family’s ancestral home in Scotland,” the LA Times reports.
Scandal upon scandal! He’s got a yacht! It’s in the Mediterranean. Where are the reporters’ yachts? Where is the Mediterranean for the reporters?
We’re not sure why this is anything but a positive story for the Journal, its editors, its reports and its readers. As we maintained from the beginning, Murdoch did not come to destroy the Journal but to own it. And now he’s personally reaching out to reporters in an attempt to keep it intact.
But there’s already a movement to make something scandalous of these moves. “Some journalists in the newsroom took the gesture as a sign of Murdoch’s commitment to keep the staff’s quality high. Others said it showed that Murdoch would take a hands-on approach in newsroom affairs despite a special committee established to keep him from interfering in coverage,” the LA Times reports.
Heaven forbid! The owner is trying to keep his top reporters! It’s a clear violation of the editorial integrity of the newspaper, which apparently now means letting the newsroom fall report.
So who are the put-upon reporters who got the call? The LA Times named them as Tara Parker-Pope, Kate Kelly and Henny Sender. The latter two are DealBreaker favorites, who have broken important stories in recent months. (Tara Parker-Pope is a Health writer.) We’re sure they’re in high demand, and it just seems demented to expect that Murdoch wouldn’t fight to keep them on board.
Our question: is this what they were talking about when they said Murdoch would “interfere” with the Journal? If so, bring it on!
Murdoch’s presence felt at Journal [Los Angeles Times]
Scandal: Murdoch Already Meddling With The Wall Street Journal
By Bess Levin
Foreign Media Mogul Already Messing With Journalists
Rupert Murdoch almost seems to be living up to the worst fears many had when made his bid for Dow Jones. Almost.
This is a list of people who we respectfully submit are liars: CNBC’s David Faber, Thestreet.com’s Nat Worden, and Reuters. We believe these entities to be capital ‘L’ small ‘i’ small ‘a’ small ‘r’s because among them they share the distinction of having reported or re-reported this morning that there will be an official announcement of News Corp.’s Dow Jones victory tonight. Nothing personal, it’s just that we no longer believe the words coming out of the mouths of people who say anything—outright, implying, leading, lip synching—that even hints that this whole thing will be conclusively finished before hell freezes over. We WANT to believe them, we just can’t. Know anyone you’d like to add to our list? Send his/her name to tips at dealbreaker dot com.
In other news, MySpace co-founder Brad Greenspan sent an open letter to Dow Jones shareholders detailing a new proposal (he’s done this before, several times) in which he would invest $600 million in cash and stock in three joint ventures with DJ. Greenspan says he’s received “interest” from five “credible” investor groups, though he would not disclose their names, and their profiles are set to private. Brad informed shareholders that he and his investors “can meet this week” in order to “firm investment commitments,” but starting next week things are going to be really tight for him, so if Dow Jones could really get back to him A-sap to nail something down that would be solid, just name the time and place, but seriously, get back to him soon, otherwise, who knows, he could be busy.
Dow Jones to Agree To Takeover by News Corp. [CNBC]
Dow Jones Deal Gets Closer [WSJ]
Dow Jones Soars As Deal Appears Near [thestreet.com]
News Corp., Dow Jones deal expected Tues [Reuters]
MySpace Co-Founder Makes Another Dow Jones Proposal [Bloomberg]
Geoffrey Raymond is at it again! Now he’s gone off and painted good ‘ol Rupert Murdoch in his classic style, but this time he’s asking for a little help from the viewer. Raymond is displaying his masterpiece outside of One World Financial Center so that Wall Street Journal employees and tourists alike can add their feelings about Rupes directly to the piece. WSJ employees in red marker, everyone else in black, with Raymond acting as a moderator. Barring rain, Raymond will be there until the end of the week and then the painting is going to the highest bidder. By highest bidder we mean any bidder, as the eBay auction starting at $3,500 has no bids to date with just three days left.
To one man walking by who refused to stop but still seemed interested, Raymond said defensively, “It’s not a picture of Rupert Murdoch, it’s a picture of a moment in the history of the Wall Street Journal.” Apparently this painting took only about two weeks to complete with Raymond rushing to finish before any official announcement about the fate of Dow Jones is announced. His painting of the $Honey is still a work in progress, he told DealBreaker — Raymond hasn’t yet figured out the finishing touch.
After the jump we bring you some pictures of the painting’s set up on Liberty Street.
The Annotated Murdoch [eBay]
Renaming an institution like the Dow Jones Industrial Average and getting people to use its new name is a pretty difficult task. It’s doubtful that either residents or tourists living near or travelling to Auschwitz-Birkenau will take the extra effort to say “Former Nazi German Concentration Camp Auschwitz-Birkenau,” though Poland is hoping we’re wrong (it’s happened). Still, it seems like there’s a chance that Rupert Murdoch suddenly get all egomaniacal upon acquiring Dow Jones, and want to brand his territory.
Thestreet.com took a shot today and came up with: “The Fox Dow Jones Industrial Average,” “The Fox Business Network Average” and “The Rupert and Wendi Murdoch Industrial Average,” submissions that don’t want to call “awful” but maybe “not good.” Definitely “not funny.” Unfortunately, it’s easier to call out other people’s shoddy ideas than come up with your own, which is our way of saying, “we’ve got nothing.” (Carney nixed Asians Keep You Young Industrial Average). So, let us know if you’ve got anything.
Ready for the Fox Dow Jones Industrials? [thestreet.com]
Dow Jones Director Gets Wells Notice From SEC
By Bess Levin
Lawsuit For Insider In Dow Jones-News Corp Deal On Its Way
We got so caught up in the excitement over the board of directors, Bancroft family, Rupert Murdoch, News Corp drama that we’d totally forgotten about the insider trading angle to this story. But fortunately we have the Securities and Exchange Commission to remind us that prior to the public learning of the deal, a Hong Kong couple with ties to Dow Board member David Li, chief executive and chairman of the Bank of East Asia, allegedly engaged in insider trading.
According to published reports, the SEC has issued a Wells Notice to Li, informing him that it plans on filing civil charges against him.
For those of you who have never gotten one—a Wells notice is a sort of like a bill from the utility company stamped Final Notice. Except that instead of shutting off your electricity, if you don’t respond to the notice you wind up getting sued by the SEC. It’s basically your last chance to convince them that they shouldn’t file a lawsuit against you. Or, as a friend of ours once put it, it’s a notice that it’s time to move your funds off-shore, get out of the country and hire some very good lawyers.
SEC to File Civil Charges Against Dow Jones Director [Wall Street Journal]
Rupert Murdoch’s News Corp will acquire Dow Jones.
Although two members of the Bancroft family signaled their continued resistance to the deal by abstaining from last night’s board vote or leaving the meeting before the vote, a key member of the board voted to accept Murdoch’s bid. The story is buried in most of the news coverage, which focussed on the broader question of board approval. But this single vote almost certainly means that nothing can stand in the way of the deal now.
The key vote came from Dow Jones board member Michael Elefante. Most of the Bancroft family’s shares are not held by individual family members but in family trusts controlled by trustees. For the first time yesterday, we learned that Elefante, a partner at the Boston law firm Hemenway & Barnes, can deliver a little less than half of the family’s 64% voting stake.
Once we know that Elefante supports the deal, the math is so easy even the Wall Street Journal can do it. “That rough one-third of the company’s voting power likely would be enough to cement a sale to Mr. Murdoch. That is because some 29% of the total voting power of the company rests in the hands of non-Bancrofts. Almost all of these holders, many of them arbitragers, are expected to support the deal,” the Journal’s report this morning states. In other words: 30% plus 29% equals more than the 51% needed to approve the deal.
So the much heralded and awaited for split in the Bancroft family has finally happened and it has the result of all but guaranteeing that Murdoch will get the company. We say “all but” only because there was earlier discussion that it might only take a small number of Bancroft shares to prevent the sale. Lawyers familiar with the transaction say this can be structured around and does not prevent a serious obstacle.
Dow Jones Board Approves Sale [Wall Street Journal]
When Wall Street Journal’s Sarah Ellison broke the story late Monday that Dow Jones chief executive Richard Zannino and News Corp’s Rupert Murdoch reached a tentative agreement over lunch to bring the News Corp’s bid for Dow Jones before the board of directors, many were surprised that the offer price hadn’t budged from original $5 billion, or $60 a share.
They shouldn’t have been. Throughout the months since Murdoch first approached Dow Jones representatives with his offer, advisers to Murdoch have coached him not to increase his bid. Early on some thought he might increase the price in an attempt to overcome resistance from some members of the Bancroft family. But Murdoch’s investment bankers advised him that it was foolish to bid against himself, raising his offer at a time when the Bancroft’s had not yet indicated that they were willing to sell at any price.
Some of Murdoch’s advisers believed that a higher, second bid might have actually invited a competing bid for the company if it was seen as Murdoch’s best offer. By sticking to the original bid, Murdoch may have discouraged other potential bidders who were not sure they could outbid the deep pockets of a cash rich News Corp.
Even after negotiations with the Bancroft family began, some observers thought Murdoch might increase his bid. “While the initial $60-a-share offer represents a hefty premium over where Do Jones’s stock was trading before Mr. Murdoch’s offer became public, Dow Jones hopes the Bancroft family’s ambivalence about the Murdoch deal could help the company extract a few more dollars per share,” Ellison writes in her story today.
The thinking in the News Corp camp, however, runs completely in the other direction. The Bancroft family had already extracted value from News Corp in the form of promises of editorial independence, and had dragged out the negotiating process—taking up time and energy from Murdoch and his advisers. These discussions and concessions have been seen as part of the price News Corp was paying to buy Dow Jones. In effect, they were counted as increasing the cost of the deal.
What’s more, the Bancroft family’s continued ambivalence despite the negotiations and concessions has frustrated Murdoch and his advisers. The view within the Murdoch camp has been that as long as the Bancroft family continued to resist selling the Dow Jones for non-financial reasons, there was little point in increasing the financial incentives.
“The Bancrofts kept saying that this wasn’t about the money,” one person familiar with the News Corp strategy said. “Murdoch decided to take them at their word.”
While initially trading higher this morning, the stock dropped today to its lowest level since the Bancroft family first agreed to meet with Murdoch at the end of May. This may indicate traders now believe that Murdoch will not offer a higher price than his original bid.
Dow Jones, News Corp. Set Deal [Wall Street Journal]