Watching the Bancrofts agonize over whether to sell Dow Jones & Co. (NYSE: DJ) to Rupert Murdoch's News Corp. (NYSE: NWS) for $5 billion is getting to be painful.

The outcome of the family's deliberations is too close to call, according to the Wall Street Journal. One family member, Crawford Hill, told his relatives during a contentious meeting "all these years we haven't done enough to question management.It seems like bad timing to start now." Good point.

As I've argued before, the Bancrofts' interest in protecting the business that's been in their family since 1902 is really late in coming. The family has cashed its substantial dividend checks for years as Dow Jones made bad decision after bad decision. They really have no right to complain about the hand the media world has dealt them.

Murdoch's $60 offer isn't just ridiculous. It's insane. No buyer with any sense would try to top it. Brad Greenspan is proposing a plan he says will boost the shares to $100. It has some interesting ideas such as having WSJ.com take on Yahoo Finance. The problem is that his expectations are extremely optimistic. I just don't see how he can generate a compound annual earnings growth rate of 60 percent.

Besides, if Greenspan's plan is so great why doesn't he present it to some backers and get funding to match or top Murdoch's offer?

Anyone expecting a white knight to come to Dow Jones' rescue is wasting their time. The Bancrofts will certainly face lawsuits from minority shareholders if they turn down Murdoch's bid. Dow Jones will be better off in the long run as part of News Corp.

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.

It looks like The Towel is unable to resist the lure of News Corporation (ASX: NWS) owner Rupert Murdoch's $5 billion. AP reports that an initial agreement was reached on measures to ensure The Towel's editorial independence.

What exactly did they agree to? That's not clear but the article quotes an anonymous source which claims Murdoch and The Towel's board have "agreed in principle on ways to ensure the Journal's independence, with some items yet to be decided."

However, since The Towel's board took away the negotiating power from the Bancrofts, it is not at all clear that the Bancrofts will now gladly accept the details of this agreement in principle -- whatever those details might be.

And since the Bancrofts control the company, we can rest assured that our opportunity to agonize over every little twist and turn of this never ending media soap opera... will continue.

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 and has no financial interest in the other securities mentioned in this post

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 New York Times [registration required] reports that Towel employees view the options for their new management as a choice between "slash" and "trash." By slash, they refer to the cost cutting of General Electric Co. (NYSE: GE) -- which may make participate in a bid for The Towel; whereas trash is their moniker for tabloid tyrant Rupert Murdoch.

Meanwhile there have been two interesting developments. Yesterday, The Towel's board decided it was time to grab decision-making power from the Bancroft family -- concluding that they were taking too long to make up their minds. And Brad Greenspan, the former head of MySpace parent, Intermix Media, is making a tender offer for 25% of The Towel at $60 a share -- the same price that Murdoch, who bought MySpace over Greenspan's objections, has offered.

Since General Electric Co. (NYSE: GE) and Pearson Plc. (NYSE: PSO) face daunting odds in trying to challenge Rupert Murdoch's $5 billion bid for Dow Jones & Co. (NYSE: DJ), why are so many leakers trying to keep this story alive?

The Wall Street Journal reports that the two companies are talking -- and it's nothing more than that -- about bidding for the New York-based media company. They would combine CNBC, Pearson's Financial Times and Dow Jones into a privately held joint venture that would be controlled by both companies with a minority stake held by the Bancrofts.

Dow Jones' controlling family would be able to sell their stakes in the company if they want or convert their Dow Jones stock into the new company avoiding a big capital gains tax. The paper said that the Bancrofts would even be willing to accept a LOWER bid than the $60 per share offered by Murdoch's News Corp (NYSE: NWS) to protect the Journal's integrity.

As I've argued before, the Bancrofts professed love for the Journal is a bit hard to believe. Maybe some faction of the family is trying to keep the media's hope that someone may thwart Murdoch's plans to buy Dow Jones to squeeze more money out of the Australian tycoon. That may explain why all of these stories are caveated with phrases such as "long shot."

I would go even farther say that the odds of a competing bid emerging for Murdoch for Dow Jones are slim to none. Chances of GE and Pearson buying the company are even lower. Even if the companies bid, Murdoch would raise his insane offer high enough to deter any rational buyer.

A GE-Pearson bid for Dow Jones makes no sense financially.

As The Journal points out, if the Bancrofts kept a 15 percent in the new company, General Electric and Pearson would have to come up with $4.25 billion in cash, most of which would probably have to come up debt and cash contributions from the U.K. publisher.

Moreover, this would be a bear to manage. Running a news operation is like herding cats on a good day. Running three organizations (CNBC, The Journal and the FT)) each competing for the same audience and the same stories would be Byzantine in complexity. There also would be epic bureaucratic turf wars since both companies would have equal say in managing the company. I suspect allowing the Bancrofts to continue to have a say the venture's affairs would create an additional set of headaches.

Since it's obvious that the GE-Pearson deal won't happen, why are people still trying to talk it up? My hunch is that the chatter is coming from across the Atlantic. Pearson is under pressure from its shareholders to dump the FT and focus on higher-growth businesses such as textbooks. General Electric would probably be keen on the idea of having Dow Jones as a buffer against the nascent Fox Business Channel.

Regardless, Dow Jones is just a business to both companies. For Murdoch, it's an object of lust. At the end of the day, emotion will trump logic.

Pearson Plc.'s (NYSE: PSO) is reportedly interested in making a bid for Dow Jones & Co. (NYSE: DJ) to counter the $5 billion unsolicited offer from Rupert Murdoch's News Corp. (NYSE: NWS). The problem is that the U.K. company can't beat Murdoch on its own and will have difficulty finding partners willing to take on the Australian media mogul.

The Wall Street Journal says that the owner of the Financial Times as been trying in recent weeks to recruit partners to pursue a bid for Dow Jones though a formal offer is a "long shot." General Electric Co.'s (NYSE: GE) NBC Universal has rebuffed Pearson which also approached Hearst Corp., the paper said.

Since nothing has actually happened yet, the question arises about who leaked the story. Was it the Bancrofts who control Dow Jones trying to find a white knight to rescue them from the evil Murdoch? Maybe it was a Pearson banker or a banker from one of the companies that was approached by the publisher.

Investment bankers have been known to leak information about deals that they hope might happen to drum up business. Pearson also could have floated a trial balloon to see how shareholders would react to the leak.

Their answer was pretty clear. Shares of Dow Jones rose a whopping 1.9 percent Friday to $59.01. Wall Street is holding its breath for a counter offer.

I suppose combining the Financial Times and Wall Street Journal would create a financial news juggernaut. The FT's strength in Europe would compliment the Journal's strength in the U.S. The problem is that it doesn't make much sense financially.

As the Journal points out, News Corp's $60 a share offer for Dow Jones values the company at 40 times 2007 earnings, less than half of the valuation of the U.K.-based publisher. That would dilute Pearson's shares significantly.

News Corp's has a market cap of $70.3 billion compared with $13.9 billion for Pearson. In boxing terms, this would be like a middleweight taking on a heavyweight. The contest wouldn't even be close.

The problem that Pearson or any other potential rival to Murdoch faces has nothing to do with money. Murdoch wants to own the Journal badly enough to pay an outrageously high price for the company that owns it. The odds of Pearson being able to find a deep-pocketed partner willing to join it in bidding for Dow Jones are slim to none.

The Bancroft family, who control Dow Jones & Co. (NYSE: DJ), need to get their stories straight.

First, the New York Times reported that the they rejected a plan crafted by their lawyers to protect The Wall Street Journal from meddling by Rupert Murdoch's News Corp (NYSE: NWS), which has made an unsolicited $5 billion offer for the media company. Reuters followed up with a story in which a Bancroft spokesman attacked the Times story as "a gross mischaracterization of the process" whatever that means.

This is more of the same nonsense. As I've argued before, the interest being shown by the Bancrofts in the Journal is really late in coming. Moreover, any committee pushed by the Bancrofts designed to "protect" the editorial integrity of the Journal is doomed to fail.

First of all, this system will create a bureaucracy that will lead to political infighting whose viciousness will be breathtaking to behold. It will be a disaster. Decisions will be made at glacial speed, something which Dow Jones can't afford in today's fast-paced digital age.

Try as I might, I 'm not sad that the Bancrofts may lose control of Dow Jones & Co. (NYSE: DJ) to Rupert Murdoch's News Corp (NYSE: NWS).

Though some journalists are arguing that a Murdoch victory would signal the end of civiilization as we know it, at least he'll take an interest in the Wall Street Journal, which is more than could be said about the Bancrofts. They watched idly as incompetent CEOs ran the publishing company into the ground and shareholders not related to them got the shaft.

Would Murdoch be that much worse? Compared with other publishing families, the Bancrofts have shown a remarkable lack of interest in their family business.

The Towel's union members are not happy about Rupert Murdoch's $5 billion bid for their employer. Neither are some shareholders, such as James Ottaway. The AP reports that the Independent Association of Publishers' Employees has reached out to supermarket billionaire Ron Burkle to make a competing bid.

Burkle, a buddy of former President Clinton who tried and failed to buy Tribune Co. (NYSE: TRB), is likely to treat union members with greater respect than Murdoch who in my estimation is a bit more to the right of the political spectrum.

Assuming that Burkle does come through with an offer, his odds of winning will be enhanced if he satisfies two tests: 1. He pays more money than Murdoch and 2. He guarantees not to meddle in editorial decisions. Up until today, I had not heard any speculation about Burkle's interest so I won't be surprised if new bidders emerge in the next few days.

With The Towel's stock closing 50 cents above Murdoch's price, it appears that investors expect more money on the table.

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 and has no financial interest in Dow Jones.

When I read Rupert Murdoch describe Monday's meeting with the Bancroft family that controls Dow Jones & Co.
(NYSE: DJ) about his $5 billion offer for the company as "constructive," I immediately thought of North Korea. Every few months, some diplomat describes talks with the secretive communist country as "constructive." Then as now, I wonder what that actually means.

Does the News Corp (NYSE: NWS) CEO consider it a good sign that the Bancrofts politely listened to his promises not to interfere with the news-gathering process at the Wall Street Journal? I wonder if Murdoch sounds more credible the more times he makes the same point over and over again.

Murdoch is balking at the demands of the Bancrofts that would give the independent board set up to protect the Journal the power to hire and fire top editors, according to The New York Times, which said the meeting lasted more than five hours. Some sort of compromise will be worked out.

Though I share their skepticism of Murdoch's promises of non-interference, I do not have much sympathy for the Bancrofts.

The family watched passively as incompetent managers drove Dow Jones into the ground. The company's present CEO, Richard Zannino, is doing a good job with the bad cards he's been dealt, no thanks to the Bancrofts who supposedly are so concerned about protecting their beloved Journal from the evil Aussie media mogul. This interest in their family legacy is too little too late.

In a spectacular waste of money, the main union representing Dow Jones workers said late yesterday that it's hiring advisers to explore alternatives to the company selling itself to News Corp. As I've argued before, Murdoch's lust for power will trump any buyer's lust for profits.

Like in most other things, Murdoch will get what he wants. It's time to face reality.

The Bancrofts, the family that controls Dow Jones & Co. (NYSE: DJ), may have to take News Corp (NYSE: NWS) CEO Rupert Murdoch at his word that he won't interfere with the editorial policies of the Wall Street Journal.

Murdoch has meddled for years in the editorial affairs of his properties, firing editors who don't follow the company line, which makes people, including top reporters at the paper, suspect he would do the same thing at the Journal. It's a well-justified fear.

But what people seem to forget is that the Australian media mogul knows that everyone knows his reputation. If he buys the paper, he isn't going to order up a raft of stories promoting his personal and political agenda. Any manipulation of the news will be done quietly and behind the scenes. At his age Murdoch doesn't want to go down in history as the person who ruined a great newspaper.

Moreover, it's against his financial interest to allow the Journal's reputation to decline. Advertisers don't want their names associated with publications that are not credible. News Corp shareholders want there to be smooth sailing as well, so that the merger integration process doesn't become too big of a distraction for Murdoch.

Any system designed to protect the Journal's editorial integrity is bound to have loopholes that Murdoch will exploit. The media tycoon told the Journal that he wouldn't give the Bancrofts any editorial control over the new company. That, of course, is his right to do as the owner of the company.

The Bancrofts, though, are in a pickle. Turning down Murdoch's offer would open themselves up to lawsuits since the $5 billion price tag is so insanely high that no company in their right mind would try to match it. The family's desire to protect the paper is admirable but ultimately is beside the point.