It seemed, for a few hours on the afternoon of May 1, as though Rupert Murdoch was about to fulfill a fantasy he’d been developing for more than 10 years.
It was a little before noon when David Faber broke the news on the CNBC show Squawk Box that Mr. Murdoch’s News Corp. had tendered an offer to buy Dow Jones Inc., which owns a raft of media properties including The Wall Street Journal, from the Bancroft family, which has controlled the company since the 1920’s.
And it was around 7 p.m. that the Bancrofts told their representative on the company’s board, Michael B. Elefante, to tell the board that the family planned to use its controlling interest to block the $5 billion bid.
Even for someone like Rupert Murdoch, some things are apparently out of reach.
In the newsroom, the panic started shortly after Mr. Faber’s revelation that a well-placed source had advised him of Mr. Murdoch’s aggressive bid: At $60 a share, he had met the price long rumored to be in the heads of the scattered Bancroft family shareholders. He had also exceeded the trading price of Dow Jones stock by 67 percent.
One staffer received a phone call from his friend, Josh Quittner, the editor of Business 2.0.
“I asked, ‘Are you looking forward to having Murdoch as your new boss?’” Mr. Quittner recalled. “My friend replied, ‘I just launched a page on MySpace: ‘I love unicorns, rainbows and Sean Hannity.’”
“It’s out of the frying pan and into a thermonuclear blast,” said one Journal staffer. “This was the worst-case scenario—other than being sold to Vladimir Putin.”
“I think it’s safe to say there was a fairly uniform, panicked reaction that rippled through the newsroom,” said another.
Around noon, Steve Yount, president of Local 1096 of the Independent Association of Publishers’ Employees (the union that represents Dow Jones employees), drafted a letter condemning the deal, which he circulated to four or five other union leaders and communication staff.
They hammered out the wording pretty fast:
“The staff, from top to bottom, opposes a Rupert Murdoch takeover of Dow Jones & Co.,” the statement read.
It was the earliest and most forceful sign of distaste from the company for Mr. Murdoch’s offer—and a somewhat ironic love letter to the Bancroft family, since the union has been in increasingly heated disputes with ownership over employee benefits and layoffs.
“Since the early part of the twentieth century, the Bancroft family has stood up for the independence and quality of The Wall Street Journal and has built it into one of the world’s great newspapers,” it read. “Mr. Murdoch has shown a willingness to crush quality and independence, and there is no reason to think he would handle Dow Jones or The Journal any differently. Despite our differences of opinion with current management, we strongly encourage the Bancrofts to continue to stand up for the institution’s independence, and to walk away from this offer.”
Longtime newspaper analyst John Morton was an early-in-the-day skeptic.
“Unless there has been a huge sea change—a tsunami—in the Bancroft family’s attitude, this is all going to come to naught,” said Mr. Morton. “I doubt whether there has been any change.”
“I don’t think the Bancrofts are unhappy,” Mr. Morton continued. “Their return on investment is still running around 16 percent. It’s not like this is a company that is in financial trouble …. There’s no way it would go through for $5 billion—let’s put it that way.”
But even he conceded that the moment of suspense was an exciting one.
“That would give him one of the two strongest newspaper franchises in the world,” said Mr. Morton, “the other being The New York Times. He already owns The Times of London, which may be the third-strongest. It would give News Corp. great gravitas, both overseas and in this country.”
Dow Jones publishes The Wall Street Journal, Barron’s, MarketWatch and The Far Eastern Economic Review, as well as owning the Dow Jones Newswires, Factiva, the Dow Jones Licensing Services, the Dow Jones Indexes and the Dow Jones Financial Information Services. Dow Jones also owns 50 percent of SmartMoney and provides news content to CNBC and radio stations in the U.S.
Analysts were quick to point to Rupert Murdoch’s plan to expand the Fox News enterprise into financial journalism.
“I don’t think it will have any effect on the New York Post,” said Daily News publisher Mort Zuckerman. “It will have an effect on CNBC—it’s a bold and aggressive move.”
“This is very different than buying just a newspaper company,” said Edward Atorino, the media analyst with the Benchmark Company. “Behind this, if you think back a few months, News Corp. has this design to build a business channel. Going after Dow Jones creates an instant credibility, brand name, content.”
But Mr. Murdoch’s dream of owning Dow Jones long predates whatever particular schemes for financial-news programming that News Corp has recently undertaken.
Jim Cramer said in a television interview at one point that he first talked to Mr. Murdoch about buying Dow Jones in 1996—for significantly more than $60 a share.
A year later, in 1997, Mr. Murdoch reportedly floated the idea to Dow Jones chief executive Peter Kann.
Several reports have surfaced over the intervening years in which Dow Jones shareholders identified Mr. Murdoch as the obvious buyer should the Bancroft family finally decide to sell. On the other hand, Mr. Murdoch has never been quiet about his interest in the company; in a May 2006 article by Franklin Foer that appeared in New York magazine, one source reportedly quoted Mr. Murdoch as saying to shareholders: “There’s no other property in the world I would love to acquire more.”
“If you think about Rupert Murdoch owning Dow Jones, the [Journal] editorial page, Fox News and New York Post,” said Alex S. Jones, the director of the Shorenstein Center at Harvard University, “you have a conservative ideological juggernaut that he would control.”
Mr. Murdoch himself fueled that speculation in an interview with Forbes’ Peter Kafka in February.
“He concedes there are pieces of the Tribune Co. he’d like to own,” Mr. Kafka wrote, “more likely Newsday than the Los Angeles Times—at a fire sale price, of course. Dow Jones? Yes, but the Bancroft family, Murdoch believes, isn’t prepared to sell. ‘Maybe in five, 10, 20 years,’ he muses. ‘But I won’t be here’.”
And so Mr. Murdoch decided to change course and gather his rosebuds right away.
“I think, if I were the Bancrofts, I would say, ‘What does this guy think he’s doing?’” said Mr. Jones. “Unless he had an understanding beforehand, he basically is stampeding them. When people get stampeded, I think they dig in their heels.”
It was just about two weeks ago—right around when Mr. Murdoch’s bid came in—that Peter Kann, the Pulitzer Prize–winning reporter who had been the company’s chief executive since 1991, stepped down from his last remaining role at the organization, as chairman of the company’s board.
Mr. Kann, like the Bancrofts, had been the target of much of the staff’s discontent at Dow Jones. But in interviews, there was always another side to their opinion of both Mr. Kann and the Bancrofts.
One reporter, speaking to Mr. Foer last year for the New York piece, offered a litany of complaints about Mr. Kann’s management of the company: Over the preceding few years, layoffs and reductions in benefits had resulted in several threatened strikes at the company.
“On the other hand,” the reporter said to Mr. Foer, “he’s all that separates us from ‘Page Six’ and Bill O’Reilly.”