Rupert Murdoch completed his $5 billion-plus deal to acquire Dow Jones & Co. Thursday, adding The Wall Street Journal to his global media conglomerate News Corp. and ending a century of control by the Bancroft family.
The changeover is sure to bring significant changes to the Journal, starting with a new management team that was announced late last week. Longtime News Corp. publishing executive Les Hinton will be chief executive, while Robert Thomson, editor of Murdoch’s The Times newspaper in London, will be publisher. Several Dow Jones executives are departing, including CEO Richard Zannino.
Shareholders approved the deal by a margin of 60.3 percent. About 78 percent of the company’s publicly traded shares were voted for the deal, while 54 percent of the Class B shares, which are largely held by the Bancrofts, were in favor.
Later Thursday, Murdoch, Hinton and Thomson addressed several hundred Wall Street Journal reporters in the paper’s main newsroom. Murdoch, holding a microphone and standing on top of several boxes of copier paper, told the assembled crowd that he had high hopes for the Journal’s future.
“I know that change is often difficult or creates nervousness,” Murdoch said, according to a transcript provided by News Corp. “If it’s particularly nervousness then certainly let us know. We’re very accessible people.”
“Our aim is pretty simple,” Murdoch said. “We have to entertain, inform, enrich all our readers in their lives and in their businesses. We must be the preeminent source of financial information and comment in the world.”
Despite a general malaise affecting many U.S. newspapers, Murdoch has said he sees major potential in Dow Jones with the booming demand worldwide for business news and information. He also intends to beef up the paper’s online operations and Washington coverage, and is contemplating changes to the Journal’s Web site to further open it up to non-paying subscribers.
The deal places Dow Jones into the fold of News Corp., which also owns the Fox broadcast network, Twentieth Century Fox, Fox News Channel, satellite TV businesses in Europe and Asia, MySpace, as well as a large group of newspapers in Murdoch’s native Australia, the United Kingdom and the New York Post.
The controlling shareholders of Dow Jones, the far-flung Bancroft family, had initially rebuffed Murdoch’s approach this spring, but eventually Murdoch was able to win over enough of them to assure the deal would be approved.
His price of $60 a share represented an extremely rich premium of 65 percent over the value of Dow Jones shares immediately before the bid became public. Other than Dow Jones, the shares of many other newspaper publishers have declined sharply this year on concerns about the companies losing more advertising dollars to the Internet.
Murdoch won his campaign to acquire the company in early August after months of wrangling with the Bancrofts, who were deeply divided over the sale. The Bancrofts’ roughly three dozen adult members are descended from the family of an early owner of Dow Jones, Clarence Barron.
The final stage of the deal was a bittersweet moment for many at Dow Jones.
“I know I speak for so many today when I say that this has been a difficult and for many a sad set of discussions,” Dow Jones Chairman Peter McPherson said in closing the shareholder meeting. He added there were “great expectations and hopes” for the Journal and Dow Jones in the future.
Several family members, as well as former board member Jim Ottaway Jr. and a union that represents Journal reporters, voiced concerns that the paper’s quality and independence would suffer under Murdoch.
Murdoch has said those concerns were unfounded, but he also agreed to set up an editorial oversight board to allay those worries. A member of the Bancroft family, Natalie Bancroft, has been named to News Corp.’s board.
“I just hope they maintain their level of journalistic integrity and excellence,” Leslie Hill, a Bancroft family member who opposed Murdoch’s bid and resigned as a Dow Jones director in July, said in an interview following the meeting. “If they improve the esthetics or layout ... more power to them.”
Dow Jones also owns Barron’s, Dow Jones Newswires, the Factiva news database, several major stock market indicators including the Dow Jones industrial average, half of SmartMoney magazine and a group of community newspapers, which the company has said it is seeking to sell.