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Dow Jones & Company, Inc. (NYSE: DJ)'s 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.
I had hoped that we could just get it over already. But NOOOOOOOOOOOOOO!! Tonight The Towel [subscription required] reports that Brad Greenspan, the guy who sold MySpace to News Corp. (NYSE: NWS), has a plan to lift The Towel's share price above $100 in two years.
This is rich. And how does Greenspan propose to accomplish this little trick? He plans to turn The Towel's subscription Web site into a free, video-focused one. He also proposes creating a financial news channel to compete with General Electric Company's (NYSE: GE) CNBC and the planned Fox Business Channel.
But wait, there's more. Greenspan also plans a "leveraged recapitalization." This would involve The Towel borrowing money to buy out 50% of its shares at $60 a share. In addition, The Towel would take on $500 million in debt to fund the digital investments. Greenspan's proposal also includes getting two board seats and would loan the Bancroft family $400 million to $600 million to fund the leveraged recapitalization.
I have to credit Greenspan for making far more entertaining use of his last name than former Fed Chair Alan Greenspan. But if The Towel had been taken over by the editors of The Onion, the satirical newspaper, I would find this Greenspan's tragi-comic plan far more credible.
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 owns General Electric stock, has consulted to News Corp.'s chairman, and has no financial interest in the other securities mentioned in this post.
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Reader Comments (Page 1 of 1)
7-20-2007 @ 8:25PM
Alan Stephenson said...
Sounds like a nice bit of financial theater to me. It's a good way to get your name on the air. Take two aspirin and call me in the morning.
7-20-2007 @ 9:21PM
Gryf Spangler said...
1) his name is Brad not Bud
2) he had been kicked out of eUniverse/Intermix about two years prior to the sale of Intermix/MySpace to News corp, which is why he hates everyone so much
7-22-2007 @ 5:56PM
DayNovo said...
Even with an alternative suitor in play Murdoch is still in prime position with the Bancrofts. The key question is where will he go next.
For more consideration click here:
http://sneakybusiness.typepad.com/sneaky/2007/07/dow-to-sell-out.html