Among a number of "under the radar stories" of the past week or so, Rupert Murdoch's splashy bid for Dow Jones may be the one that seems well covered, but isn't. Some of the best coverage, curiously and admirably, is coming from the Wall Street Journal itself, showing remarkable ability to evaluate a story at arm's length even if that arm is in the middle of it.
Make no mistake, Murdoch's overvalued offer - an absurd premium over the $33 stock price that had been out there - was largely a play to give legitimacy to his goal of launching Fox Business News as a cable channel. In one swoop, Murdoch would control the market's major indicator (the Dow Jones Industrial Average) and it's most legitimate arm of business reportage in the Wall Street Journal. At the same time, it would seriously undermine his main cable competitor - CNBC, which currently has agreements with WSJ including use of Dow statistics. CNBC's presumed legitimacy in the business news channels - CNN Financial plays a distant second - is one of Fox's biggest hurdles, as anyone whose watched Fox's "Business Block" can attest, Murdoch has virtually nothing, and almost no bench strength on this front.
Moreover, controlling the WSJ would probably allow Murdoch to do it what he's done to the Times of London - undermine it's credibility while trading on its long-earned reputation as the platinum brand in American business news. Murdoch has never (ever) been able to make The New York Post (or the Boston Herald, for that matter) profitable concerns, running them as loss leaders to keep his name in major markets. The WSJ doesn't have these problems - though it is struggling in some respects like other major dailies, only WSJ can get away with an all subscription website, since its content is in such high demand, which would allow Murdoch to combine some of his operations and stanch the bleeding at the Post. Murdoch would also probably love to align the paper's coverage more closely with the paper's deeply conservative (and wholly independent) editorial page operation, which is slightly to the right of Atila the Hun, as they say.
Will it work? Who can tell? Like the New York Times, Dow Jones is actually controlled by one family - the Bancroft family, descendants of the Barron clan that started Dow Jones. The younger Bancrofts seem interested in selling, but older relatives are leery. It's hard to tell if they consider their mission as sacred as the Sulzbergers (who, after all, are under even more pressure to change), so it could happen. One can only hope that sober heads prevail.
All of which makes the interesting sideshow attending Murdoch's offer more curious - apparently, word of Murdoch's offer led to insider trading in Dow stock prior to public announcement. The news today that a Hong Kong couple is under investigation for insider trading by the SEC, and that others are under investigation as well is fascinating... especially because initial rumors that it was Dow Jones folks intervening in their own stick may turn out, in fact, to be about Murdoch executives (the Hong Kong couple's involvement in telecom and satellite work in China could well be related to Murdoch's operations, even as the woman's father has connections to a board member of Dow Jones). Such news wouldn't help Murdoch's case with regulators. But that's a slender reed to count on with a sale like this.
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