Murdoch takes charge at Dow Jones with call to march on 'FT'
Rupert Murdoch promised to be a "strong custodian" of The Wall Street Journal and an "even more formidable" competitor to the Financial Times as he emerged triumphant in the most audacious takeover battle of his long career.
The septuagenarian media mogul named the five members of the independent board that would oversee the editorial integrity of the paper, as Journal staff in New York heard an hour-long presentation from the chief executive of its parent company, Richard Zannino, aiming to reassure them about life as part of the News Corp empire.
Posing an immediate challenge to Mr Murdoch, upset readers deluged the Journal's websites with threats to cancel their subscriptions, adding to the difficulties already being caused by a decline in advertising revenue that is running at 7 per cent. Many readers said they believed the paper would be taken downmarket, or its financial reporting compromised by the demands of Mr Murdoch's other business interests.
An independent board of journalistic and community grandees will oversee the Journal's editorial integrity and have the power to adjudicate on grievances, protect senior editors from interference by Mr Murdoch, and to veto the most senior hirings and firings. Members of the five-person board include the former Associated Press president Louis Boccardi, and Jack Fuller, a former executive of the Tribune group which owns the Chicago Tribune, as well as a former member of Congress.
Mr Murdoch said he would plough new resources into the newspaper and the other businesses he is acquiring with the $5bn takeover of Dow Jones. The company's board approved the deal late on Tuesday night, when members of the controlling Bancroft family holding 37 per cent of the vote indicated they would back Mr Murdoch. That figure is more than enough to ensure victory when the $60-a-share deal is put to a full shareholder meeting later this year.
"Given the Bancrofts' long and distinguished history as custodians of Dow Jones, we appreciate how difficult this decision was for some family members, so I want to offer the Bancrofts my thanks, and an assurance that our company and my family will be equally strong custodians," Mr Murdoch said.
"In combination with News Corporation's assets, The Wall Street Journal and the other Dow Jones operations will be even more formidable competitors as we profitably extend their invaluable information across our print, broadcast and digital platforms around the world."
Mr Murdoch has promised to beef up the European and Asian editions of the Journal, representing a significant new competitive threat to the Financial Times, which is owned by UK-listed Pearson.
News Corp won over a majority of the Bancroft family only after fraught last-minute haggling over who would pay their legal fees. James Ottaway, the head of another family which controls 7 per cent of Dow Jones, described their agreement as a black day for journalism. "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."
Leslie Hill, a member of the Bancroft clan who had been opposed to the deal, resigned from the Dow Jones board yesterday.