If Rupert Murdoch really thinks he’s an appropriate guardian of The Wall Street Journal, he needs to clean up his act.
Firstly, he needs to make a public declaration that Dow Jones journalists would be free to comment about News Corp’s affairs rather than be regarded as PR adjuncts to the Sun King’s relentless empire building.
When I ran for the News Corp board in 2002, Rupert censored the entire platform, including this line:
Mayne believes the company needs an experienced journalist on its board to complement the strong business focus of the existing directors and to promote the concept of editorial independence from the company’s commercial operations.
The deadline for nominating at the 2007 AGM — Rupert’s first re-election contest in decades — is next Tuesday and I’m very tempted to test whether Rupert has learnt to behave in light of his self-portrayal as a good boy.
As part of Rupert’s charm offensive with Dow Jones shareholders, maybe he should try making the following pledges:
- Admit he was wrong to back the Iraq war.
- Announce the phasing out of page 3 girls in The Sun.
- Appoint an independent chairman of News Corp and a clear majority of independent directors.
- Unwind the notorious poison pill and introduce one class of shares to reduce his voting stake from 38% to 12%.
Finally, the true size of Rupert’s proposed cash takeover for Dow Jones should be recognised. Rupert is offering a flat $US60-a-share in cash. Dow Jones has 19.95 million super-voting shares and 63.68 million common stock, so $US60 would value all of the equity at $US5.02 billion.
However, Dow Jones also disclosed $US508 million in debt in its latest quarterly release, so the total call on News Corp’s resources will be $US5.51 billion if the bid succeeds.
The 2007 Dow Jones proxy statement also gives a good rundown of the board and largest shareholders. Suggestions that the founding Bancroft family are totally removed from the running of the company are clearly wrong. Christopher Bancroft, 55, controls 19% of the super-voting shares and has been a director since 1996. The proxy statement also discloses the following:
Mr Bancroft and Ms Steele are first cousins. Ms Hill is the first cousin, once removed, of Mr Bancroft and Ms Steele.
Therefore, the Bancrofts only avail themselves of 3 of the 16 board seats, something Rupert can’t claim at News Corp where the family directly has 25% of the board seats, plus a handful of sympathetic executives and friends padding out the numbers.