Murdoch Wins Dow Jones: Now What?

For his part, Murdoch hasn't demonstrated that he's any better than his rivals at generating profit growth with newspapers. His company and its shareholders, however, are content to let him operate newspapers like the New York Post at a loss, betting that its influence will boost its other media assets. This put Murdoch in a position to offer a price for Dow Jones that couldn't be matched by any other prospective buyers and refuse to raise it during negotiations.

Despite the safe harbor that News Corp. offered for Dow Jones, its purely nonfinancial interest in owning the publisher only underscored the nonfinancial concerns that Bancroft family members and others voiced about Murdoch -- that he will value his own political and business interests above the independence and high editorial standards of the Journal.

Peter Kann, the former chairman and CEO of Dow Jones, said that opposing Murdoch's bid was "the right thing to do" after the Bancrofts initially declined to consider the offer when it first became public in May. Another nonfamily controlling shareholder at Dow Jones, James Ottaway, said a sale to News Corp. "would not be a good thing for Dow Jones, for The Wall Street Journal, for American journalism, or for the integrity of business and financial news in America, upon which our free markets rely."

In the end, the shareholder that swung the pendulum in News Corp.'s favor was a Denver law firm holding 9.1% of Dow Jones' voting shares, called Holme Roberts & Owen. The firm had been holding out for a higher price, arguing that its super-voting shares were worth more than the public shares and deserved a higher premium.

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