Once Rupert Murdoch had lured the Bancrofts on to the battlefield with his aggressive $60-a-share offer for Dow Jones, they did not stand much of a chance. It was a mismatch of arch-dealmaker against a group of amateurs. On top of that, the Bancroft family did not even have a coherent position to work with. Having expended their energies arguing among themselves whether or not to sell and how to protect the Wall Street Journal’s editorial independence, there was no real opportunity to push up the price. It now looks almost certain that News Corporation will win the day without having to raise its offer.
Fortunately for the Bancrofts, News Corp is still paying more than top dollar for the company. But, given how badly Mr Murdoch wanted Dow Jones, the family and its advisers could probably have pushed him above his initial bid if they had handled the negotiations better.
Where does this leave other newspaper businesses controlled by families with super-voting share structures, such as the New York Times Company? First, the sale of Dow Jones underlines that money talks. The Bancrofts were once able to rely on solid cash flows from Dow Jones to fund their arms-length ownership and protection of its editorial independence. With those cash flows now under threat from seismic shifts in the media industry, a massive premium from News Corp was increasingly likely to outweigh higher principles.
Investors should not, however, hold their breath for a similar outcome at the New York Times. First, Mr Murdoch has coveted the Journal for many years and was willing to go beyond purely economic considerations to get it. There is no obvious buyer waiting to do the same for the New York Times. Second, the Sulzberger family that controls the newspaper group is not fragmented like the Bancrofts. Arthur Sulzberger in effect controls the votes and is also closely involved in running the business as chairman. New York Times shareholders could still be in for a long hard slog.