Monday, June 11, 2007 | So my old boss has decided to go after Dow Jones and the heirs to the Bancroft family fortune appear to be peeing in their soup over the thought of selling to Rupert Murdoch.
Along comes Rupert with his $60 per share, 67 percent premium offer over the value of the stock and the family can’t figure out what to do. Hello!
I know all the old wives tales and more of the criticisms which are always thrown at Rupert. I can recite them in my sleep.
My take on Rupert: He’s the smartest fox in the forest. He simply has that unique ability to see around corners.
The mainstream media elites and their cadre of other brain dead leftists are in panic over the thought of Murdoch owning the Wall Street Journal.
Do they honestly think that Rupert would turn the WSJ into a New York Post. I understand that the Post‘s brand of journalism and headline writing might not appeal to some sensitivities with its sometimes off the wall headlines like “Headless Body in Topless Bar” or pictures of bare-breasted beauties which appear on Page 3 every day in the London Sun.
They would like you to forget that he also owns two of the finest newspapers published anywhere in the world: The Times of London and The Australian.
As usual they miss the point. Their self-inflicted ideology prevents them from seeing beyond their distaste for the Post or the Fox News Channel. Are they so out of touch with reality as to believe that he would, in their words, “dumb down” the Wall Street Journal. News Corp. wasn’t built by a fool.
It is all very reminiscent of Rupert’s acquisition of the Chicago Sun-Times in 1984.
In announcing that the paper was for sale, its publisher said Marshall Field IV, who owned the Sun-Times, would entertain bids from “all qualified parties” and then added that “Rupert Murdoch need not apply.” Six months and $90 million later, Rupert owned the Sun-Times.
And three months after that, a class from Northwestern University’s graduate school of journalism concluded that the Sun-Times had already become a better newspaper under Murdoch’s ownership.
The hullabaloo over his impending ownership of the Sun-Times was deafening. The boo birds were out in full force, ringing their sweaty hands over the thought of KRM coming to Chicago. The demise of the Sun-Times, which they believed was imminent, never happened.
The nonsense even included Mike Royko insisting that “no self-respecting fish would be wrapped in a Murdoch newspaper.”
Try as it may to stay neutral in its news coverage of the possibility of being sold to Murdoch, a Journal headline calling him a “necessary skunk” might suggest otherwise.
Dow Jones has not exactly been a beacon of enlightened management over the past 30 years. It has allowed Bloomberg, Reuters and Thomson to jump ahead of it as the more significant purveyors of worldwide financial information. And now with Reuters and Thomson combining into a single giant, Dow Jones appears to be sucking wind as a distant third.
Joe Nocera, who writes the Talking Business column in The New York Times calls the combined CEO tenures of Warren Phillips and Peter Kann at Dow Jones between 1975 and 2006 “as one giant disaster. They were newspaper men in love with ink and paper, who could never fully commit to the idea that newspapers were becoming an increasingly outmoded way of distributing financial information and data.”
Time has a way of changing certain perceptions. Go back thirty years and the heirs of Lord Thomson were known for buying only small newspapers in towns which you’ve never heard of, in the U.S. and Canada. They were distinguished by and only for their cash flow. News content was non-existent. After all, Lord Thomson had once remarked that news “was something you put between the ads.”
You won’t exactly find standing room-only crowds these days waiting to buy daily newspapers.
The Tribune Company, owner of both the Chicago Tribune and Los Angeles Times, held an auction in January and no one showed up. The Tribune solution was to sell to Sam Zell who is putting up $315 million to gain control of a company whose market capitalization is valued at more than $8 billion. The debt risk in this deal is on the head of the employee stock ownership plan.
So along comes Rupert with his audacious bid for Dow Jones and all hell breaks out in the halls where journalism’s elites hang out.
It is not a stretch to say that with the stroke of his pen, every newspaper company suddenly became more valuable. Stock prices of even the smallest of those which trade publicly jumped with the news of Murdoch’s offer.
Let the Bancrofts reject Rupert’s offer and their stock will be down in the $30 range again. That alone ought to give them pause to think this offer over.
I was with Rupert when he saved the Boston Herald from extinction and put the Sun-Times back on a path to financial stability so I have a different perspective than most of my brethren in the newspaper world.
To be fair, some criticism of Murdoch’s global operation might be understandable if his mass circulation tabloids are all that you know about the News Corp. But viewed as a whole, there is so much more to his company. His marketing strategies are designed to fit each game plan. No two are alike.
Most of the daily newspaper business is spinning downward, public company share prices have fallen (until Rupert came along) and buyers are a hard commodity to find.
One might expect more from the leftists who dominate American’s newsrooms than for them to be throwing darts at the one man who continues to express confidence in the American newspaper.
Circulation is falling off the precipice and buckets of advertising dollars are disappearing across a wide swath of daily newspapers while the elites choke over the very thought of Murdoch riding in to rescue the Bancroft family fortune with an offer worth more than twice its present value.
Among the largest 25 daily newspapers, only two, the Journal and USA Today, show gains in readership. The Journal was up six-tenths of a single percentage point in the figures released for the six months ending March 31.
Closer to home, The San Diego Union-Tribune and the Los Angeles Times continue to endure precipitous drops in circulation. The U-T‘s daily five day average has slid to 296,331, a 6.58 percentage drop from the previous six months, and to 378,696, a 7.27 percentage drop on Sunday.
The Times circulation is down to 815,000 daily, a drop of nearly 30 percentage points in recent years and its Sunday sale is down another 4.73 percent to 1,173,098.
What the numbers mean for the Union-Tribune is that no more than 26 percent of the total number of households in San Diego County on a daily basis and only 34 percent on Sunday are reading the newspaper.
The Wall Street Journal is a terrific newspaper and I could not imagine going a day without it but its corporate parent is in need of a fast fix. The Bancrofts better take Rupert’s offer before the sun sets on Dow Jones.