The following statement, issued overnight in the US, is from Jim Ottaway Jr. regarding News Corp.‘s $60-a-share offer for Dow Jones. Mr. Ottaway and his family own 6.2% of Dow Jones supervoting Class B shares.
The sale of Dow Jones to Rupert Murdoch and his News Corp. global media giant would lead to loss of the unique news quality and integrity of The Wall Street Journal and other Dow Jones publications and Internet services, and loss of the independence and integrity of a leading national editorial voice.
The brand name, the major asset of Dow Jones, is based upon its reputation for, and daily practice of, accurate, fair, objective and reliable business news reporting. This would be damaged and if Rupert Murdoch and his News Corp. take over Dow Jones. It is this journalistic integrity which has created shareholder value, as recognized by the News Corp. offer. It will continue to create shareholder value in the future of our information society.
In his charm offensive of public media interviews to convince Bancroft family members holding a majority of voting shares to accept his opening offer of $60 a share, Mr. Murdoch said, “We are the sort of people with the same traditions that I think will prove great guardians for this paper (The Wall Street Journal).”
That is not true. The Bancroft family tradition since Clarence Barron bought Dow Jones in 1905 has been to hire first rate managers and editors and let them run the company, without Bancroft family interference in editorial opinions or news coverage, with family influence on business decisions exercised through its representatives on the Dow Jones board of directors.
Rupert Murdoch comes from a very different tradition of Australian-British media ownership and editorial practice in which he has for a long time expressed his personal, political, and business biases through his newspapers and television channels. We see this every day here in America in his New York Post which regularly runs biased news stories and headlines supporting his friends, political candidates and public policies, and attacks people he personally opposes. His Fox TV News Channel, run by Roger Ailes, a former Republican party strategist, is a unique example in American broadcasting in which one man’s political opinions have become the editorial and news policy of a major national news channel.
I defend Rupert Murdoch’s rights of free speech and press freedom. But I also defend the Dow Jones and American journalistic tradition of a strict separation wall between political opinions expressed vigorously on editorial pages, and news reported with as much factual objectivity as humanly possible. This is the tradition that the Bancroft family has protected, and Dow Jones editors and reporters have practiced, with great courage and quality for 102 years.
This is not an abstract philosophical principle. The unusual independence and high standards of journalism practiced at Dow Jones attract and motivate many of the nation’s best and brightest reporters and editors. They recently won two coveted Pulitzer Prizes for outstanding public service and international investigative reporting in the Wall Street Journal — they are the best in the business. Their accurate and unbiased news reports are relied upon by the most influential investors, business and government leaders in America. This is Dow Jones’ major asset that Rupert Murdoch’s different style of journalism and proposed ownership of Dow Jones would threaten in the minds of astute readers and advertisers.
When Rupert Murdoch’s business and news interests conflict, his business interests usually prevail. There is a clear conflict between his business interest in News Corp’s Star TV broadcasts into the huge China market, where he has had to kowtow to Chinese Communist government censorship of news and opinion, and the sharp criticisms of Chinese Communist violations of human rights, religious rights, and free speech which The Wall Street Journal editorial page has published more frequently than any other major American newspaper. I doubt its freedom to criticize the Chinese government would continue under Murdoch ownership.
The Bancroft family has treated Dow Jones as a public trust, not for personal or political interests, or maximum enhancement of family wealth by sale to a high bidder. The family has respected its inheritance as a responsibility to protect an important national institution that plays a major role in American democracy and debates of public issues because of its editorial independence and high news quality standards.
The Bancroft Family and trustees tried to protect this public service role of Dow Jones by writing into the company’s certificate of incorporation the right of the controlling owners to consider the effect of a business transaction “upon the independence and integrity of the corporation’s publications and services and the social and economic effects of such actions.” They knew the family would be tested some day by an offer like Rupert Murdoch’s. They gave this wise guidance to today’s Bancroft family members faced with this historic decision.
I am opposed to Rupert Murdoch’s buying Dow Jones to boost his personal prestige, political power, and global media business control, and to acquire Dow Jones brand name business news because he needs it for his new business news channel to succeed. The Economist magazine describes Murdoch’s pursuit of Dow Jones as “the media equivalent of a trophy wife.”
I am also opposed to Rupert Murdoch taking over Dow Jones because it would add to already too much concentration of American and global media ownership, and political influence on American society and government decision making.
Dow Jones publishes one of only three high quality national-impact newspapers still controlled by original family owners — including The New York Times and The Washington Post. They clearly produce the best journalism in print and on the Internet because they are public companies controlled by families who protect their independence and high standards. Rupert Murdoch and his News Corp. have a different agenda when they misuse their media ownership concentration for personal, political, and business interests, not primarily the public interest.
Murdoch promises editorial independence and no interference in news judgments if he were owner of Dow Jones. He has made these easy promises of an eager buyer in the past, but not always kept them. And since he is 76-years-old, his promises, no matter how sincere, will not last very long. Who will keep his promises in the future ? Rupert Murdoch is a remarkably vigorous man, but he is not immortal.
News Corp. is not a good long term owner of Dow Jones. There is no clear News Corp. management succession, a history of disagreements with his sons, and inevitable future arguments over ownership control and management influence among his children.
The Bancroft family has its own natural disagreements, but its 80% of family voting shares against sale of Dow Jones to News Corp. shows a model of family unity compared to the succession problems that the Murdoch family and News Corp. will face in the not too distant future.
Dow Jones has no good reason to be sold to anyone. It is in a much better business and financial position than it was after the Internet market bubble burst in 2000, and a national decline in newspaper advertising cut its revenues and earnings dramatically. And it is led by a new and younger generation management team in both business and news operations that is taking the company quickly into the Internet Age of information distribution. Dow Jones is strong financially, doing better than most publishing companies, with remarkably good growth last year and in the first quarter in newspaper advertising, circulation and Internet-based revenues. The total company is on track to 50 % of operating income coming from fast-growing electronic information businesses.
Finally, the $60 price per share offered for Dow Jones should not be the deciding factor for Bancroft, Ottaway, and other long term investors. The important question should not be whether the right price is $60, $75 or $100 a share for Dow Jones. The important question is, why should Dow Jones be sold to anyone? It is not necessary for any internal business reason. And the Murdoch family future uncertainties are no solution to questions about long term Bancroft family ownership.
I think the controlling shareholders of Dow Jones should answer News Corp’s unsolicited offer by saying, “Dow Jones is not for sale, at any price, to Rupert Murdoch.”