Monday, June 4, 2007

The Public's Enemy Hits Bumps In The Road

The Gawker compares Murdoch's WSJ bid with "You're Gonna Get Yours," the lead cut from Public Enemy's Yo! Bum Rush The Show:
Murdoch is, of course, the "subject of suckers, object of hate," in spite of the fact that his Oldsmobile Ninety-Eight (News Corp.) is indeed "fly" and "bulletproof." And while suckers (Journal staffers) may have the "nerve and gall to talk about" the car "while they're walking tall," his two-thirds-over premium bid for Dow Jones (which includes The Wall Street Journal, "the ultimate homeboy car" of business journalism), does indeed "blow them all away."

While certain elder members of the Bancroft clan did "call [him] a punk," Murdoch "took their girls and got them to thrill [him]." Today, when the Bancrofts step outside and get in his ride, Murdoch may try to dazzle them with "tinted windows"—so superbad — but beware, whatever he says, eventually he'll "rub his boomerang because he's feeling proud," and will not even recall what promises he made about editorial independence 'cause his radio's loud. His Ninety-Eight Oldsmobile's like good stuff.
But Murdoch's fly machine is already hitting a few bumps in the road.

For starters, the union representing Dow Jones & Co. has retained financial advisors to look for alternatives to the News Corp. bid.

And here's some interesting analysis from the International Herald Tribune, suggesting even a small minority of the Bancrofts could block a sale:
Under Dow Jones rules, Class B shares have 10 votes per share, while Class A shares, the ones traded on the New York Stock Exchange, have but one vote. But when Class B shares are sold, they become Class A shares, and lose their special voting rights.

There are now more than 20 million Class B shares outstanding, 82 percent of them controlled by the Bancroft family and another 6 percent controlled by the Ottaway family, which has strongly opposed a sale to Murdoch. There are 63.7 million Class A shares...

Buying some Class B shares would simply raise the relative voting power of the remaining Class B shares.

At least theoretically, investors owning just 9.1 percent of the stock, or 7.6 million shares, could control the company if those were the only Class B shares left outstanding after the other shares were sold to Murdoch.
Meanwhile, Murdoch refuses to give the Bancroft family control of any editorial-oversight board:
That kind of board should comprise "people with absolutely no business connections to me nor the family," Murdoch said, according to the Journal. He added the family "can't sell [Dow Jones] and keep it" by joining a newly created board. "I can't put down $5 billion of my shareholders' money and not be able to run the business."

But he repeated that he has "no plans to change anything" on the news side of the paper.
Hmnn. He is happy to hand control of the editorial to an "independent" board, but not to the Bancrofts, because he needs to keep control. Ri-i-ight...

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