Yesterday a Bancroft clan meeting took place in Boston to discuss various ennui of the whole News Corp. offer-shtick (Will scantily clad pictures of the genetically blessed Murdoch spawn, Lachlan, be included in the deal? Were Rupert and Colonel Sanders separated at birth?). What transpired? As is the norm for this as-exciting-as-backdating story, a whole lot of nothing. Some people (William Cox Jr., his four children, who together control 15% of the family’s total Class B shares) didn’t even show up, though it didn’t stop them from weighing in on the situation. Christopher Bancroft said that he opposes the sale to News Corp., fearing that it would threaten the Journal’s independence. Viewed as an “influential” member of the family, with his two siblings, Bancroft controls roughly one-third of the family’s stake in Dow Jones, and is also one of the company’s sixteen directors.
Yesterday Bancroft said that he’s “open to any situation that benefits the Wall Street Journal and Dow Jones and its shareholders. At the moment, I don’t see anything that would do that.” He added that he has a “strong emotional connection to the paper” and doesn’t want to “pull the rug out” on the staff, who he feels responsible for. Bancroft said that he even sent replies to letters from fifty Journal reporters (it’s unclear if these were actual letters or email letters but the sentiment is duly noted).
Meanwhile, there’s a bunch of unexpressed anger going on within the family. Some—mostly the younger Bancrofts—feel they haven’t truly been included in the decision making process. The youth vote also wants to explore the idea of a third-party investor, as the question as been raised regarding whether or not Dow Jones can survive on its own. And of course there’s the heated debate over who should’ve been covering “Pinch” Sulzberger when he stole home during the Bancroft-Sulzberger Kick-Ball Jamboree of ’89. But that’s been brewing for a while, and doesn’t really have much to do with News Corp.
Key Dow Jones Holder Cites Opposition To Murdoch Bid [WSJ]
Wall Street Journal
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Bancroft
The Dow of Rupert, Part II: Can A Family Divided Against Itself Stand In The Way Of Murdoch?
By John Carney
This week in the Dow of Mudoch opens with the collective lenses of the media tightly focused on the key players—Rupert Murdoch and the Bancroft family.
(Of course, there’s also that news that Murdoch delivered to the family this morning and that the Bancroft’s are holding a meeting to discuss the offer. But we already touched on that stuff a little while ago. Now it’s time to delve into the fun bits: stalking the principals.)
As we predicted, journalists seem to be hunting down the Bancroft family where they live. Over the weekend, the Journal described the Bancroft’s as divided between those who “distrust Mr. Murdoch’s media conglomerate” and “those at least willing to hear what Mr. Murdoch has to say.” The Journal also ran a family tree—just like the New York Observer, but less cute—that broke the family down into three factions. The Hill family is “considered to be the most willing” to take Murdoch’s offer seriously. The Branch descended from Jane Hill are described as “the most fervent about maintaining the Wall Street Journal’s independence.” The rest, apparently, is anyone’s guess.
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Bancroft
The Dow of Murdoch: Rupert Murdoch Brings The Bancroft Family Together
By John CarneyThe family that controls 64% of the voting power of Dow Jones & Co is reportedly meeting right now to discuss News Corp’s bid for the company. David Faber of CNBC reported just a short while ago that the Bancroft family, which controls Dow Jones through its super-voting shares, was holding a conference call “right now” to discuss the bid. This may be a sign that the family is re-considering its rejection of the News Corp offer.
Today Bancroft family members received a letter from Rupert Murdoch stating that he regrets the details of the offer had become public and promising to establish an “independent, autonomous editorial board” to oversee the paper. In the letter, Murdoch describes himself as a “first and foremost…newspaper man,” praises the Wall Street Journal’s “journalistic independence and integrity” and says his is “unwilling to contemplate” any interference with the paper’s integrity. He writes that he would like to appoint a member of the Bancroft family to the board of Dow Jones.
“This letter may give the Bancroft’s a way to accept Murdoch gold , if that’s what they’re looking for,” an investment banker familiar with the deal told DealBreaker. “They’re haven’t been any other bidders, which must put pressure on them to accept this offer.”
Murdoch probably hopes that this is exactly what effect his letter will have. He’s steadfastly refused to offer more money than his original offer. Last week, CNBC’s Charlie Gasparino reported that he had been advised not to offer more by his bankers at JP Morgan had told him not to increase the bid. As we explained on Friday, Murdoch’s strategy to win over the Bancroft’s now appears to rely on charm and promises to not ruin the paper.
Murdoch also promises to make efforts to keep the team of “journalists, editors, management” of the Journal and other Dow Jones properties, expand the Journal in Europe and Asia and improve the Journal’s New York headquarters.
Text of Murdoch Letter to Bancrofts [Wall Street Journal]
News Corp & DJ Update [CNBC.com]
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Business Media
Dow Jones Insider Trading Watch: Two Charges, Dow Jones Director Scutinized
By John Carney
That was fast! The Securities and Exchange Commission didn’t waste much time going after investors who bought shares of Dow Jones & Co in the weeks prior leading up to the public revelations that News Corp had offered to buy the company at a steep premium. Yesterday, the SEC filed a lawsuit against a Hong Kong couple, Kan King Wong and Charlotte Ka On Wong Leung, accusing them of insider trading. The couple had purchased $15 million of Dow Jones shares prior to the May 1st announcement.
“It was their first purchase of Dow Jones shares — and a profitable one,” the Wall Street Journal reports today. “After the unsolicited offer was disclosed May 1, Dow Jones shares rose more than 50%. Three days later, the couple had their broker sell their entire position in the stock for a profit of $8.2 million.”
The close timing of the purchases with the announcement make it highly unlikely that this was simply a case of lucky timing on the part of the Wongs. Adding to the suspicion that the couple had insider information is the risk they took on buying the $15 million of stock. Prior to the transactions, the Wongs reportedly had only $433,000 in their Merrill Lynch account available for purchasing equities. They borrowed money from Ms. Wong’s father and used margin loans to buy the stock. Another stock purchase was funded by a money transfer from an unknown person using a JP Morgan Chase account in Brussels. The stock purchases—the couple accumulated the stock over the course of a couple of weeks beginning April 13—were also a stark departure from the usual investment pattern of the Wongs. “The SEC said that prior to their Dow Jones stock purchases, the Wongs owned mostly fixed-income securities, as well as equities valued at $606,600,” the Journal writes.
The questions everyone is asking is: what did the Wongs know and how did they know it?
It’s unlikely that Rupert Murdoch will be hatching the next phase of his campaign to buy Dow Jones tonight. Instead, he’ll be chowing down at Cipriani in midtown, where he is being honored at the Manhattan Institute’s annual Alexander Hamilton dinner.
Fortunately, Cipriani is just a few blocks away from the offices of Skadden Arps, News Corp’s lawyers. So if the Bancroft’s decide to return his calls tonight, he’ll be able to start wheeling and dealing in short order.
Alexander Hamilton Award Dinner [Manhattan Institute]
Center of the Action [New York Sun]
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Business Media
The New York Times Looks Inside The Wall Street Journal And Discovers A Neon Sign Proclaiming ‘Rupert Was Here’
By John Carney
If the phrase ‘jumped the shark’ hadn’t long ago done so itself, we might write that the news coverage of News Corp’s bid to buy Dow Jones jumped the shark this morning. The business news media is obsessed with the story—which just happens to be about the business news media. And sometime late last night and early this morning—to the sound of full-color print presses humming and newspaper delivery trucks idling—the coverage of the story really began to plumb the depths of its own navel.
This morning the New York Times delivered the news that—as the headline proclaimed—‘Wall St. Journal Editors Held News of Murdoch Bid.’ (Click here for Joe Weisenthal’s reaction in Opening Bell.) It’s a story that the Times editors viewed as important enough to run on the front page of the business section. So what we end up with is a story in a business section (the Times) about how a business news organization (the Journal) covered an acquisition about a business news organization (also the Journal). And now all the other business news organizations (CNBC, the wire services, DealBreaker) are reporting and commenting on that.
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Business Media
Wall Street Journal Pulitzer Prize Winners Encouraged To Oppose Murdoch Bid
By John Carney
The Wall Street Journal’s Pulitzer Prize winners are being courted by a campaign to oppose News Corp’s bid for Dow Jones & Co, according to a source within the newspaper. The prize winning journalists are being asked to sign a letter opposing the bid. It is unclear whether the letter would include signatures from only Pulitzer Prize winners currently working at the Journal, or include the larger group of reporters who won while at the Journal who have since left. In the past ten years, the Journal and its reporters have won over a dozen Pulitzer Prizes.
The letter would resemble those that sometimes appear on matters of public concern signed by leading members of various academic or scientific communities. Recently a group of prominent physicists, including several Nobel laureates, sent a letter to US lawmakers urging measures to restrict the use of nuclear weapons by the United States. The WSJ Pulitzer letter would encourage the board of directors of Dow Jones, or possibly the members of the Bancroft family who control the company through their Class B shares (which have ten times the voting power of ordinary shares), to oppose the bid from News Corp to acquire the company, the source claimed.
It is not clear who is organizing the campaign, and DealBreaker has not yet obtained a copy of the proposed letter. Last week DealBreaker broke the news that Jesse Drucker, a Journal reporter and union representative, was encouraging colleagues to protest the deal by writing letters to three members of the Bancroft family who sit on the board of directors.
A List of the Wall Street Journal’s Pulitzer Prizes [Wall Street Journal]
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