CNBC broke the day's—maybe the year's—blockbuster media story: Rupert Murdoch's News Corp. is making an unsolicited bid for Dow Jones, worth about $5 billion. Wow.
This isn't a total surprise—in fact, the LA Times and others have previously predicted just such an offer—but it's already got media industry watchers chattering and speculating. The stock market is just as excited: Dow Jones stock has jumped more than 50 percent today on the $60-a-share offer (the stock was trading at about $37).
This is going to be an interesting one to watch. Dow Jones is controlled by the Bancroft family, with a two-tier stock arrangement much like that of The New York Times Co. or The Washington Post Co. The family owns about 62 percent of the voting stock. Is that an impervious bulwark against a takeover? Probably not—Murdoch's rich offer surely will turn the heads of some family members frustrated by the stock's lackluster performance over the past few years. (See Ken Auletta's excellent 2003 story in The New Yorker for background.)
But if the family decides it wants to cash out but can't stomach Murdoch, it might attempt to turn to a "white knight" bidder. Two possibilities:
• The New York Times Co., which made an overture to Dow Jones about a possible merger four years ago and was rebuffed. Obviously the combination of the New York Times and Wall Street Journal in the same ownership stable would create an incredible media power center (but what would antitrust regulators think?)
• The Washington Post Co., which would be an equally good fit, bringing together the leading media powers in the worlds of politics and finance, Washington and New York. As Auletta reported, Post CEO Don Graham has been circumspect about having any interest in Dow Jones, but many Post company executives have advocated internally over the years for a combination of the two companies. Could now be the time?
Murdoch's bid has a preemptive feel, given how much richer it is than the recent market price of the stock (remember, Tribune Co. had trouble attracting bids much higher than its recent average stock price). And Murdoch has a motive to make a preemptive bid: His forthcoming Fox News Channel (a CNBC competitor), which would be much more effective if attached to the Dow Jones and Wall Street Journal brands. The Journal has a long-term content-sharing deal with CNBC, but hey, deals can be broken.
This is going to be fun to watch. Can Rupert Murdoch's money overcome any misgivings the Bancroft family has about Murdoch ownership of one of journalism's great franchises? Would they rather hook up with the Sulzbergers or Grahams? Or will they try to stay independent? Stay tuned. Given the personalities and brand names involved, this is going to make the Knight Ridder and Tribune Co. conflagrations look minor.
Update: Alan Mutter, as always, has some interesting thoughts on the Murdoch bid. I think he's probably right that Murdoch is going to be hard to beat, because he's got additional motivations to do a deal. But I still think we're going to see some interesting action on Dow Jones--especially since the Bancroft family, at least initially, appears to be opposed to Murdoch's bid. Or maybe they're just looking for a better price!