Dow Jones & Company's (NYSE: DJ) Wall Street Journal (a.k.a., The Towel) occupies a unique spot in the media firmament. As I pointed out earlier in the year, it changed its format and now looks to me like a Holiday Inn bath towel. Towel Talk offers a perspective on its news and views.
The Times article pointed out the many instances where Murdoch used his money to buy legislative outcomes that helped him expand his business empire. One new thing that came out of the article was that Murdoch's HarperCollins signed a $250,000 book contract with Senator Trent Lott. Lott helped pass legislation that raised the federal limit on broadcast ownership share from 35% to 39% -- enabling Murdoch to hold onto all his Fox affiliates rather than divesting some to comply with the 35% rule.
The inference was that the Lott book deal bought his vote to raise the limit. But these nuggets don't seem to me like they will derail Murdoch's deal.
Separately, The New York Times reports that Murdoch is closer to a deal with The Towel. The remaining sticking point seems to be how the Bancroft family will seek to keep Murdoch from using his ownership of The Towel to shape coverage that conforms with his goals. I don't think there's much of a gap between Murdoch's political views and that of The Towel's arch conservative editorial page. Nor do I think the Bancroft family will ever agree with Murdoch on measures that protect it from Murdoch.
Nevertheless, over the weekend, according to The Towel [subscription required] Rupert Murdoch was insulted by the Bancroft family's proposal to protect The Towel's editorial integrity. This proposal suggested that a seven-member Special Committee on Editorial and Journalistic Independence and Integrity be established with approval rights over the appointment and removal of Essential Journalistic Officers such as The Towel's managing editor, editorial-page editor and publisher, as well as the managing editor of Dow Jones Newswires. The proposal also guaranteed the jobs of the existing people in those positions.
Murdoch was outraged because he saw the proposal as limiting his control over the editorial content of The Towel. So his advisors drafted a two page letter withdrawing his $60 a share offer. And that threat led to a conversation with The Towel's board which enabled the negotiations to resume.
Ultimately I think that enough Bancroft family members will decide to take the money, overruling those who disagree with a Murdoch buy. If another bidder was going to emerge, now would be a good time.
Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has consulted to News Corp's CEO, has had a book published by HarperCollins, and has no financial interest in the other securities mentioned in this post.