Monthly Archives: May 2007
Bancroft family agrees to meet with News Corp.
by Chris Roush
The Wall Street Journal is reporting that the Bancroft family that controls its parent, Dow Jones & Co., has agreed to meet with News Corp. executives who have offered $5 billion to purchase the company, according to a statement from the family.
Sarah Ellison, Dennis Berman and Susan Pulliam wrote, “The statement, set after a special meeting of the company’s board, said: ‘After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corp.’ (Text of statement)
“The Bancroft family will meet News Corp. ‘to determine whether, in the context of the current or any modified News Corp. proposal, it will be possible to ensure the level of commitment to editorial independence, integrity and journalistic freedom that is the hallmark of Dow Jones,’ according to the statement. A representative of the company’s board will be present at those discussions, leaving room for the board to play a more active role than it has so far.
“The family also said it was receptive ‘to other options that might achieve the same overarching objectives.’”
Read more here.
Meanwhile, Dow Jones issued a statement that said in part: “In light of this information, the Board of Directors has determined to consider strategic alternatives available to the Company, including the News Corporation proposal. The Board of Directors also indicated that a representative of the Board of Directors would be present at the Bancroft family’s discussions with Mr. Murdoch and News Corporation. There can be no assurance that any transaction or other corporate action will result from this exploration of alternatives or that the Board of Directors or the members of the Bancroft family will support any specific proposal received by the Company.”
Statement from union representing Dow Jones journalists
by Chris Roush
Statement from Steven Yount, president, Independent Association of Publishers’ Employees, which represents business journalists at The Wall Street Journal, Barron’s, Marketwatch and Dow Jones Newswires.
“While we understand the Bancroft family may have an obligation to hear out potential opportunities, we urge them to stand firm and maintain their principled stand to maintain the integrity of The Wall Street Journal and all Dow Jones publications. We don’t believe the promises Mr. Murdoch has made can be trusted. Dow Jones must remain an independent company if it is to prosper both as business and a journalistic enterprise. As the organization that represents over 2,000 Dow Jones employees, IAPE will do everything in its power to make sure that Dow Jones remains the independent, trusted source of information that has made it a success for over a century.”
Public pressure won't convince Bancrofts to sell Dow Jones
by Chris Roush
Applying public pressure to persuade Dow Jones & Co.’s family owners to sell the media company to News Corp. CEO Rupert Murdoch may do more harm than good, according to a Reuters story Thursday.
On Wednesday, the chief investment officer of T. Rowe Price, the largest institutional investor in the owner of The Wall Street Journal, said it wishes the Bancroft family would consider Murdoch’s $5 billion offer.
Reuters reporter Svea Herbst-Bayliss wrote, “‘Large investors will try to put pressure on the family to sell and I, too, wish they would say ‘Yes’,’ said Jean-Marie Eveillard, a top mutual fund manager who owns Dow shares. ‘But I’m not sure this will help the situation.’”
Later, the story noted, “Meanwhile other large investors like Fidelity Investments and hedge funds have kept silent about Murdoch’s proposed deal, something investors and analysts say is a smart move.
“Fidelity managers own Dow Jones shares and the company manages Dow Jones’ retirement plans.
“‘The big players often have conflicts of interest that force them to stay silent. But even if we still owned a lot, I don’t think we would have tried to help our case by pressuring the family,’ Eveillard said.”
Read more here.
NYTimes reporter moves to new beat
by Chris Roush
New York Times business reporter Laura Holson has a new beat covering the communications, wireless and entertainment industries, according to a memo from business editor Larry Ingrassia.
Ingrassia wrote, “The revolution sweeping the communications world is changing the way that we live and work, and is likely to be one of the biggest business stories of the rest of the decade. As Laura notes, ‘We have already seen some of the effects of this, but it is only going to become more pronounced as mobile phones become more like little handheld computers where people shop, are entertained, communicate with friends and others via social networking sites and manage their personal lives the same way they have become accustomed to with their PCs.’
“Laura’s mission will be to chronicle this revolution, and what it means for traditional telecom companies like AT&T and Verizon, and the growing number of players (ranging from Google to media companies to VC-financed startups) that want a piece of the action. And the action is likely to be fierce, because the stakes are so high. The winners could pocket billions in revenue from high-margin entertainment, service and information offerings delivered on wireless and fiber-optic lines, while the losers will struggle to make money in commodity telecoms businesses.
“Similarly, the handset makers Nokia, Motorola and now Apple, with its iPhone, will play a major role in this changing world, with the most innovative cell phones making it possible to do things that no one could have imagined even a few years ago.”
Holson has previously covered Wall Street and Hollywood. Brooks Barnes from The Wall Street Journal will replace Holson covering the entertainment business.
Indiana minority biz magazine sold
by Chris Roush
Indiana Minority Business Magazine, a four-year-old publication founded by a local businessman, has been sold to the Indianapolis Recorder newspaper, one of the oldest black newspapers in the country, according to a release, for an undisclosed price.
The Recorder says it plans to use the magazine to raise awareness in the minority community about diverse areas of business. Although the newspaper tackles issues in the black community, the magazine writes about issues and topics for all minorities, such as women and the growing Hispanic population.
“We’re becoming a much more culturally diverse population. With the magazine, many of the business issues we are seeing are ones all small and minority businesses are seeing. It’s not just one race,” said Carolene Mays, publisher and president of the Recorder, in the release.Â
Additional staff, including magazine founder Rickie Clark, will be brought on board. While the publication will maintain its current name, the editorial content, look, and design will be slightly enhanced. “We’ve been working extremely hard to produce a product that covers different aspects of business, but will also be an interesting read for individuals outside of the industry,� explained Recorder vice president and editor Shannon Williams in the release.
Read more here.
WSJ finally gets it with employment numbers
by Chris Roush
The New York Post business columnist John Crudelle writes Thursday that The Wall Street Journal finally understands that the government’s jobs numbers may not be accurate.
Crudelle wrote, “It only took the nation’s most prominent business newspaper a decade and a half to figure it out, but the Job Market’s Strength May Have Been Overstated.
“That was the headline the other day in The Wall Street Journal, which considers itself the nation’s pre-eminent financial newspaper.
“And in many ways it is the best at what it does, except when it comes to getting its nose real close to the government’s economic statistics and figuring out why they don’t smell quite right.
“As I’ve been saying for the past 15 or so years (yeah, it seems longer to me, too) the government’s monthly employment report stinks.
“The Journal – as well as its sister publication, Barron’s, and The New York Times – suddenly discovered that Washington’s numbers don’t jibe with figures compiled on a quarterly basis by the individual states.
“And like a bunch of babies who’ve just discovered their navels, these publications are now gazing excessively at the hole in the job figures.”
Read more here. The Post is owned by News Corp. CEO Rupert Murdoch, who is currently trying to acquire Dow Jones & Co., the Journal’s parent.
Gas price coverage is up and down
by Chris Roush
Henry Banta writes on the Nieman Watchdog site that business media coverage of higher gas prices shows a gap between sophisticated coverage and what’s reported in the “popular media.”
Banta wrote, “As any reader of the Wall Street Journal knows, there is information available. And there are other good sources; Steven Pearlstein of the Washington Post consistently provides first rate analysis.Â
“But the popular media, network television in particular, abandon all pretense at serious journalism when dealing with gasoline prices. What passes for coverage is usually a microphone stuck in the face of a motorist who confirms what we all know, prices have gone up. This is followed by a brief interview with an expert who invokes the notion that it is all a matter of supply and demand, as if that ended the discussion. This is followed, no doubt for sake of ‘balance,’ by someone labeled a ‘consumer advocate’ who invokes the even more useless notion of ‘price gouging.’ There the matter is left to rest. Even ‘in depth’ coverage rarely gets beyond further interviews with experts from the window-shade-school of economic analysis: this number will go up; that one down; this one down; that one up.
“What is lost in this ritual is some basic journalism. There are some simple common sense questions that are not asked. Start with the question of supply. Gasoline prices are up because refineries do not have the capacity to meet demand. It is frequently pointed out that no new refinery has been built since the late 1970s (implying that the problem is the fault of environmentalists.) But this fact alone raises a host of questions. Certainly gasoline demand has grown considerably since the late 1970s. Until now the industry has been able to meet demand growth with the expansion of existing refineries? Why not now?
“Granted Hurricane Katrina did considerable damage to the refining industry, but Katrina was almost two years ago. Has not there been time to line up more gasoline imports? Surprisingly, the head of the Energy Information Agency recently told Congress that imports were down. If refining capacity was a problem, why were imports down? If, as has been occasionally suggested, there is a worldwide shortage of refining capacity, why is the explosion of refined product prices limited to the United States?”
Read more here.
Former WSJ reporter says Murdoch will meddle
by Chris Roush
Matt Pottinger, a former Wall Street Journal reporter who is now a Marine serving in Iraq, writes an op-ed piece for the Washington Post that states that News Corp. CEO Rupert Murdoch has routinely meddled in media coverage of China, where he was a journalist.
As such, Pottinger warns that the same thing could happen if Murdoch was allowed to acquire Dow Jones & Co., the parent of The Wall Street Journal.
Pottinger wrote, “Murdoch is not an editorial ogre but a smart, charming businessman with a pioneering style of journalism that has its place in a free country. His editorial support of America’s troops is generous, and he has created a fresh point of view with Fox News. I’m also told he keeps his hands off the Australian, one of the many newspapers he owns. But the Wall Street Journal is not Fox News or the Australian, and its mission is not their mission. China will be the biggest story of the 21st century. Its policies and progress must be understood and reported fearlessly. Beyond that, the Journal brings us a quality of news that’s not only unusual but important to our future.
“Several days ago in western Iraq, an unseen guerrilla detonated a bomb moments after my fellow Marines and I had driven over it. Marines call near misses like this a ‘gut check.’ I know why I took certain risks working for the Journal, and I know why I take them as a Marine, and while I still haven’t figured out how to say it without sounding too earnest, high-minded and patriotic, I’ll say it anyway: Some things in America need to be protected, and none more than a free and intrepid press. Because no one exercises that role better than the Journal, the loss of its rigorous, undiluted reporting would be a hole in America’s heart deeper than that hole in the road.”
Read more here.
T. Rowe Price wants Bancrofts to consider Murdoch offer
by Chris Roush
T. Rowe Price, the largest institutional investor in Dow Jones & Co. stock, wants the Bancroft family that controls the company to consider the $5 billion offer from News Corp. CEO Rupert Murdoch, according to a Reuters story. Dow Jones is the parent of The Wall Street Journal, Barron’s and Marketwatch.
Megan Davies wrote, “A spokesman for T. Rowe Price told Reuters the offer should be considered, but stressed the firm had not directly appealed to the Bancroft family, which controls 64.2 percent of voting shares.
“‘We’ve said all along that, as long-term investors in Dow Jones stock, we’re gratified that other investors have recognized the value that we always thought was there,’ the press officer said. ‘We think it is a reasonable offer to take under consideration.’
“The Financial Times earlier quoted Brian Rogers, the chairman and chief investment officer of T. Rowe Price saying the offer at $60 was a fairly attractive transaction price.
“‘I find it hard to believe the company itself has a plan to get the shares to $60,’ the Financial Times quoted Rogers saying.”
Read more here.
National Review challenges WSJ to debate
by Chris Roush
The editors of the National Review want to challenge the editorial board members at The Wall Street Journal to a debate on the immigration bill pending before Congress.
“It shouldn’t be a problem for the Journal’s editors to take up this challenge, since opponents of the bill aren’t ‘rational’ on the question, have no arguments, and are ‘foaming at the mouth,’ as they explained in a videotaped session of one of their editorial meetings last week. Click here to watch — you have to see it to believe it.
“We urge them to come out of the shadows, and hope defending the bill in this forum is not another one of those jobs that no American will do. (We would challenge President Bush himself to a debate on behalf of the conservatives he has maligned, but we fear he hasn’t read the bill.)”
Read more here.