Today, Rupert Murdoch is seated atop the greatest media throne in the world, as he closed a deal to buy Dow Jones & Company after three months of speculation and family drama.
And Wall Street Journal reporters had reason to believe, by yesterday afternoon, that the world was coming to an end. They were to be seated on bar stools.
For reporters at the Liberty Street office in Manhattan, there was a bit of irony in the selection of watering hole, as e-mails circulated encouraging them to meet up at Sheep Station, an Australian pub in Park Slope.
Shedding a tear into a cold Foster’s is one thing; another Journal bureau was in full widow’s weeds. At 3 p.m., a copy of the newspaper lay on a chair, serving as the centerpiece to a toast of the last days of the “pre-Murdoch Wall Street Journal,” according to a staffer present, who asked the bureau not be identified. They raised bottles of beer and plastic cups brimming with Ardbeg single-malt Scotch to James Ottaway, the former Dow Jones board member most vocal in his opposition to the sale, and heaped praise upon anti-deal family members Leslie Hill and Christopher Bancroft.
But 15 minutes later, staffers returned to their desks to hammer out the next day’s stories—an awkward moment of getting back into the reporting grind, after a day of obsessively following the fate of their own newspaper on its Web site.
The night before, the Bancroft family, which held the controlling share of the votes that would be necessary to approve Mr. Murdoch’s $5 billion offer, blew a deadline: After passing a self-imposed 5 p.m. cutoff to conduct a final straw poll of Bancroft voters, each latest bit of family drama unfolded in pixels, not picas; by the time the presses were rolling, there still was no answer on the deal.
That task was left to David Faber of the television network CNBC, who confidently reported the deal done at 9:25 in the morning.
It was a tidy blow to the newsroom. On May 1—when he broke the news of the bid—Mr. Faber had scooped The Journal on its own story.
Shortly before 11 a.m., Reuters came through with an attributable quote. The offender was John Prestbo, editor and executive director of Dow Jones Indexes, who told Reuters the family had accepted and Dow Jones would become part of News Corp.
Shouldn’t that have come from Dow Jones chief Richard Zannino, or family trustee Michael Elefante? Or at least some flack for the Dow Jones board?
But shortly after 12 p.m., The Journal finally reported that a Dow Jones fund was being set up to pay the banking and lawyer fees for the Bancroft family, a move that had been the final sticking point before the required 32 percent of Bancrofts votes could be vouchsafed for Mr. Murdoch.
That the Dow Jones board offered to pay those fees as part of the deal rankled many of the deal’s opponents.
“It is ironic indeed for the Bancroft family to have to pay 30 shekels of silver to their investment bankers, and 30 shekels of gold to their corporate lawyers, for scaring some of them into betraying their 105-year family loyalty to Dow Jones independence,” Mr. Ottaway said in a statement later that evening.
In the newsroom, too, the real ennui came because the final battle, as they saw it, for the Journal was not a battle of good vs. evil.
Earlier in the process, a lengthy and sometimes acrimonious-seeming back-and-forth between Mr. Murdoch and the Bancroft family led some Wall Street Journal staffers to credulity about the Bancrofts’ concern over the post-Bancroft newspaper.
In the newspaper’s own A3 story on July 31, you could almost read the disappointment seething between the lines of one paragraph:
“Helping persuade the Denver trust to change its mind was a decision by Dow Jones’s board to create a fund to cover payments to firms advising Bancroft family members, including Merrill Lynch and the law firms Hemenway & Barnes and Wachtell, Lipton, Rosen & Katz. News Corp. would assume these liabilities if it bought Dow Jones. The fees could total at least $30 million, according to people familiar with the situation.”
And, as CNBC later reported, Wachtell Lipton stood to get some $10 million of that money.
So in the final moments, the deal appeared to depend not on what Mr. Murdoch would do with the newspaper, but whether the advisers who had been pushing the deal would be able to recover some $30 million in fees from Mr. Murdoch instead of the Bancrofts. Like a finders’ fee, only paid by the person found.
“There’s a lot of corruption in this deal; people are getting bought off,” said a Journal staffer that morning. And: “How can they claim to be giving independent advice when their fees are paid for by Dow Jones?”
“It’s all coming out of Rupert Murdoch’s pocket,” the staffer continued. “It just looks like The Godfather.”
“I think the No. 1 feeling is unbelievable outrage at the obscene conflict of interest between the lawyers and bankers,” said another Journal staffer, angered by the deal. “These money-grubbing scumbags were conspiring with Zannino from the start to make this deal happen. They had no motivation to present them with a fair and balanced assessment of the company’s prospects.”
“The Bancrofts managed to extort an extra $30 million out of him basically to pay for the costs to sell the company to him,” said one veteran staffer. “It’s disgusting. People in the newsroom have been outraged about that. If he has $30 million to pay off the millionaire advisers who helped arrange the sale, we’d like to see that translate into something that actually makes a difference for the staff.”
“Now the burden is on Rupert,” added the staffer. “He needs to make some commitments to the staff. He has said he’s going to invest in this paper. It’s time he brings that same tremendous bit of financial security to the people who work here.”
Robert Block, a Journal reporter based in the Washington bureau, said that for months there had been a steady parade of Dow Jones executives passing through D.C., trying to restore the faith of worried staffers.
Recently, according to Mr. Block, the management types had begun to change their tune.
“It’s a much more powerful message that I’m starting to hear,” said Mr. Block. “They’re saying that if people leave they should leave for acts that are real, not imagined. In the meantime, everyone should fight for the journalism they believe in. It’s a more powerful message. And I think there’s something noble and romantic about it, which ultimately is more appealing.”
“If the paper’s management were to come out and offer a Henry the Fifth-type speech—we band of brothers, all of us who leave will curse ourselves for not being here and fighting for the things we believe—it could be a really powerful statement to Murdoch, to the industry and to the Bancrofts,” said Mr. Block. “I’m not necessarily sure it has a snowball’s hope in hell of working. But I find the idea moving.”
In addition to Dow Jones management, several Journal staffers were critical of the position of managing editor Marcus Brauchli, who was advising the family, and former managing editor and current editor-at-large Paul Steiger, who oversaw the Journal coverage of the deal despite standing to pocket nearly $4 million in compensation and equity stake if the deal goes through, and possibly a News Corp. board seat too.
For Mr. Brauchli, a newsroom favorite for some time, whose promotion became effective May 15, rebuilding the relationship with reporters may be difficult.
“People generally like Marcus but he’s going to be in an untenable position,” said one staffer. “He reports to Rupert Murdoch now. He’s going to be faced with a whole series of unpleasant decisions. In the end, he’ll do what Murdoch tells him or be fired.”
As for Mr. Steiger, an announcement was sent on the Journal’s internal Web site on the morning of July 31, announcing that the former editor-at-large was being awarded the Fourth Estate Award from the National Press Club.
The award, according to an internal memo, “goes annually to an individual who has achieved distinction for a lifetime of contributions to American journalism.”
For some Journal staffers, Mr. Steiger could have stood against the deal and left the paper with a different legacy.
“Everyone had tremendous amount of respect for him,” said a Journal staffer. “He had the potential to go down as one of the great figures of journalism.”
“The irony of the day,” said another Journal staffer, is “Steiger winning this award on the day he sold the crown jewel of American journalism to a creep.”
“We’ve already been through cycles at The Journal where we’ve had layoffs and buyouts,” said one Journal staffer based in California. “A fairly common thought was that we could weather the family’s determination not to accept Rupert. Now we’re back on eggshells wondering what he’ll do—and hoping that his words are truer than some of his past actions.”
In the weeks leading up to the final vote, gallows humor started to set in around the newsroom.
One e-mail making the rounds rewrote the lyrics to the R.E.M. song “It’s The End Of The World As We Know It” imagining life with Rupert.
Small posters of the face of Ms. Hill, a former airline pilot, started popping up in the newsroom, bearing the legend “I Fly With Leslie,” a homage to the Bancroft trustee who was still, at press time, attempting to put together a counteroffer with Brad Greenspan, founder of MySpace.
At one point during the protracted negotiations, Journal staffers became frustrated with Bancroft family trustee and Dow Jones Board Member Michael Elefante, for negotiating what many saw as a toothless editorial independence agreement with Mr. Murdoch.
Following the news of the “done deal,” one Journal staffer in New York printed out a famous caricature of Mr. Murdoch drawn years earlier by the cartoonist David Levine.
Originally commissioned by New York founding editor Clay Felker, when Mr. Murdoch was negotiating to buy the magazine, the drawing features Mr. Murdoch’s head attached to the body of a bee, a reference to the Murdochian tabloid obsession with killer bees.
When the staffer hung a print out on the bookshelf by his office, he added a new caption: “Killer Bee Reaches Liberty Street.”