Transcript
BROOKE GLADSTONE:
Although the offer was made over two weeks ago, it was revealed this week that Rupert Murdoch has made a serious bid for the Dow Jones Company, owners of The Wall Street Journal. Offering roughly 67 percent more than the current market value, Murdoch's offer was meant to impress. An analyst suggests it's just the first salvo in a war to win over the Dow Jones family owners, the Bancrofts.
Franklin Foer, editor of The New Republic, has written about The Wall Street Journal and its suitors. He says that despite The Journal's protected status as a family-owned paper, it's been roughed up by the market it covers so well.
FRANKLIN FOER:
Dow Jones has been run in a way that has produced almost zero growth and hasn't really found a very good long-term plan to survive in the age of the Internet.
BROOKE GLADSTONE:
Yes. You've noted, with some irony, that the paper that diagnoses businesses can't seem to heal itself.
FRANKLIN FOER:
And more than that. The paper, especially in its news pages, has crusaded for shareholder democracy and transparency. And yet, you have this company, like The New York Times and The Washington Post Company, which gives the family that essentially founded the papers disproportionate control in the decisions that affect the management of the company.
But there's an important difference between the Bancroft family and the Graham and Sulzberger family, which is that Donald Graham is the CEO of The Washington Post Company, Arthur Sulzberger is the CEO of The New York Times Company, but the Bancrofts, over the course of the last 80, 90 years, have been removed from the upper echelons of management of the company.
They've essentially been very good stewards to the paper. They've been very proud of owning the Dow Jones. But they've left the day-to-day operations in the hands of managers from outside the family.
BROOKE GLADSTONE:
My understanding is that the Bancrofts have begun to fight among themselves, and that, in fact, they aren't as rich as the Grahams and the Sulzbergers and are likely to be tempted by a Murdoch offer.
FRANKLIN FOER:
Well, that's right. The initial inheritance of the paper has been subdivided over the generations. And so the bulk of the Bancrofts, while very rich, are not in the category of the super-rich. And so the fact that the company has stagnated actually affects them in a very direct sort of way.
And Murdoch, by making this major bid for the paper, has brought in a bunch of big private investors keen to profit over a potential sale. And if that sale doesn't happen, those investors are going to race for the doors, thus causing the stock price at Dow Jones to plummet and really hitting the Bancroft family where it hurts.
BROOKE GLADSTONE:
This week, The New York Times said that after the refusal of his first offer, Murdoch is ready to begin his charm offensive. I assume that means he thinks he can turn a couple of key Bancrofts around?
FRANKLIN FOER:
No doubt that charm offensive will ultimately involve him boosting his bid from a $60 a share to something, it seems like, closer to a $70 a share bid. And I think that $10 difference will be where the charm lies.
BROOKE GLADSTONE:
It's hard to imagine why anyone would want to buy into the newspaper profession now.
FRANKLIN FOER:
Murdoch isn't necessarily buying The Wall Street Journal because he expects that it could produce such amazing returns. I think that it's largely a passion project for Murdoch. And Murdoch has done this in the past. He's bought The Times of London, he bought the New York Post, neither of which were able to turn a profit in a very immediate sort of way.
And he's especially worshipful of The Wall Street Journal, and he's been talking about buying it for a very long time. And he's getting towards the end of his career, and I think that he views this as some sort of legacy mission.
BROOKE GLADSTONE:
Does that mean he's [LAUGHING] likely to ruin the paper? Because the union that represents journalists at The Journal also released a statement this week, and they expressed their total lack of confidence in Murdoch as an owner. Obviously, Murdoch has played different roles in his different newspaper projects.
FRANKLIN FOER:
Well, if I was the newspaper, or union, at The Wall Street Journal, I wouldn't be terribly confident either. Murdoch has a horrible record on labor issues and is famous for busting up newsroom unions. But there's some ultimate question at The Wall Street Journal of how much worse an owner he would be than the Bancroft family. [BROOKE LAUGHS] The paper's been terribly run, and that's resulted in all sorts of cutbacks over time, scaling back of bureaus. And the editorial page at The Wall Street Journal is already right wing, so he's not going to destroy the politics of the paper in any sort of way.
BROOKE GLADSTONE:
I was reading a column by Daniel Gross in Slate, and he said that maybe Murdoch wouldn't wreck The Wall Street Journal because it's one of the only papers that his billionaire buddies actually read.
FRANKLIN FOER:
You know, that's true. I think that the paper is something that is consumed loyally and voraciously by Murdoch's social set, and if he began to mess with it too much, it wouldn't be great for brunches or charity balls. So I think that he probably would be reluctant to tinker too much with the news side.
BROOKE GLADSTONE:
All right. Frank, thanks very much.
FRANKLIN FOER:
My pleasure.
BROOKE GLADSTONE:
Franklin Foer is the editor of The New Republic.
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BOB GARFIELD:
This is On the Media from NPR.