Say what you will about Rupert Murdoch, the Australian brawler who runs the entertainment and media conglomerate known as News Corp.: he doesn’t shy away from big bets. He’s just written what amounts to a cheque for $5-billion U.S. and dropped it on the desk of the Bancroft family, which controls Dow Jones, and with it the Wall Street Journal — one of the world’s most prestigious media properties, both online and off.
The offer, which the Dealbook blog at the New York Times says (quoting David Faber of CNBC) has been in the works for a couple of weeks now, pushed the share price of Dow Jones up by more than 60 per cent at one point, to its highest level in more than five years. As one analyst pointed out, that’s going to make it pretty hard for the Bancroft family to resist. It’s well known that the family has been unhappy with the performance of Dow Jones for some time. The company’s first-quarter profit fell by more than 60 per cent, according to a report from Bloomberg. On the other hand.
An acquisition by Murdoch would definitely cause some fireworks in the U.S. media industry — not just because he runs a giant conglomerate, or because he’s Australian, but because he’s most closely associated (in the U.S. at least) with down-market entities such as Fox News and the New York Post, as Cynthia Brumfield points out at IPDemocracy. That’s probably not going to sit too well in some circles, including (possibly) the Bancroft household.
With Sam Zell buying the Chicago Tribune, and Rupert Murdoch paying a huge premium for the Wall Street Journal, does this mean newspaper stocks have hit bottom? And could the New York Times be next?
Salon co-founder Scott Rosenberg has some thoughts on the deal that are well worth reading — and notes the irony that the WSJ, the bastion of all things capitalist, is getting a fairly strong dose of its own medicine with this bid. And the Newsosaur says the premium was a signal to potential bidders (such as Bloomberg) that Murdoch is determined to do whatever it takes to get the Journal. Om thinks it could be the beginning of an acquisition wave.