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Rupert Murdoch’s Wall Street Journal: Bancroft Family Members Now Regret Sale

| July 14, 2011

wall street journal rupert murdoch news of the world

Smudging toward Fox. (© FlaglerLive)

A number of key members of the family which controlled The Wall Street Journal say they would not have agreed to sell the prestigious daily to Rupert Murdoch if they had been aware of News International’s conduct in the phone-hacking scandal at the time of the deal.

“If I had known what I know now, I would have pushed harder against” the Murdoch bid, said Christopher Bancroft, a member of the family which controlled Dow Jones & Company, publishers of The Wall Street Journal. Bancroft said the breadth of allegations now on the public record “would have been more problematic for me. I probably would have held out.” Bancroft had sole voting control of a trust that represented 13 percent of Dow Jones shares in 2007 and served on the Dow Jones Board.

Lisa Steele, another family member on the Board, said that “it would have been harder, if not impossible,” to have accepted Murdoch’s bid had the facts been known. “It’s complicated,” Steele said, and “there were so many factors” in weighing a sale. But she said “the ethics are clear to me — what’s been revealed, from what I’ve read in the Journal, is terrible; it may even be criminal.”

Elisabeth Goth, a Bancroft family member not on the Board who had long advocated change at Dow Jones, expressed similar sentiments. Asked if she would have favored a sale to Murdoch in 2007 knowing what she does today, she said, “my answer is no.”

The comments by family members in interviews with ProPublica came as the crisis engulfing Murdoch’s News Corporation threatened to spread to the U.S. with two senators calling for an investigation into whether the company broke U.S. laws over the phone hacking scandal.

Asked for his reaction to a report in the Guardian that Les Hinton, Murdoch’s appointee as Dow Jones CEO and Journal publisher, may have testified untruthfully to a parliamentary committee, Christopher Bancroft replied that if the report proves accurate, Hinton “probably ought be moved aside, but that’s not my business anymore.”

News Corporation’s deal to buy the Journal was sealed in August 2007, six months after the royal editor of the News of the World, Clive Goodman, was jailed for using a private detective to access voicemails left for members of the royal household.

But News International insisted that hacking was a problem confined to a single “rogue reporter” at the paper. It was not until July 2009 that the Guardian revealed the practice was more widespread and that Murdoch had secretly paid out more than £1m to settle cases brought by other hacking victims.

The Wall Street Journal is the top-selling daily newspaper in the United States and a brand with global prominence. Founded in 1889, it long dominated American business publishing, becoming the country’s first national newspaper. It routinely ranked in surveys as America’s most trusted print publication.

The Bancroft family owned Dow Jones since 1902 and controlled it as a publicly traded company since 1963. Murdoch’s bid was economically attractive. He offered $60 a share, a 67 percent premium, $2.25 billion over the market price the day his offer was announced, at a time when newspaper share prices had been flagging for more than two years. Within 14 months after the deal closed, in early 2009, News Corp. had to write down the value of its $5.6 billion purchase by $2.8 billion.

The sale was contentious. Family members questioned Murdoch’s journalistic practices and insisted on appointment of an independent panel to help safeguard the paper’s ethics. And there was plenty of negative press in the U.S. about Murdoch at the time of the deal in 2007, although nothing to compare with the recent revelations.

Michael Elefante, a partner at Boston law firm Hemenway & Barnes, longtime counsel to the family, trustee of numerous trusts and also then a member of the Dow Jones Board, did not return messages seeking comment. The fourth family representative on the Dow Jones Board, Leslie Hill, consistently opposed the Murdoch bid, and resigned from the Board in protest just before the deal was completed. (Hill has been a donor to ProPublica.)

Not all members of the Bancroft family believe the revelations would have changed the outcome. Bill Cox III, long allied with Goth within the family in seeking alternatives to management by Dow Jones, said in an interview that he “probably would have thought twice about it but probably would have sold.”

Cox said he is “happy about the price we got” for Dow Jones. “I’m pretty happy being out of the newspaper business altogether.” Asked if he would have accepted a lower price from another bidder given the phone hacking, he said, “I think $60 was the right price.”

Cox did say, however, that he had been following the story closely in the Australian media during a trip there and that he is very concerned about what he has learned recently about the Journal’s new owners.

“Reading all this makes me sick to my stomach,” he said. In a subsequent email, he went even further: Rupert Murdoch, he wrote, “thinks he is completely above the law as he always has.” Cox added, “We did a deal with the devil and it really saddens me [that] the editorial of this quasi public trust that has been on the vanguard of world journalism for years is not in good hands. That I am really struggling with.”

–Richard Tofel, ProPublica

Disclosure note: The author of this story was a longtime Dow Jones executive, before leaving the company in 2004, and wrote a book about former Wall Street Journal editor and Dow Jones CEO Barney Kilgore, which was published in 2009. This story was co-published with The Guardian.

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5 Responses for “Rupert Murdoch’s Wall Street Journal: Bancroft Family Members Now Regret Sale”

  1. lawabidingcitizen says:

    What nonsense.

    The WSJ was as leftwing as any publication for a very long time (Al Hunt was editor for goodness sake), so these mea culpas are pretty self-serving.

    Perhaps they’re afraid they won’t be invited to A-list parties anymore.

    My money is on Murdoch who, by the way, is no conservative — he was a major contributor to and supporter of Hillary in the last election, coming out on top of this situation and his accusers being left with the proverbial egg on their faces.

  2. Dorothea says:

    LAC, the WSJ left wing? If that’s what you think, that puts you to the right of Atilla the Hun. While the news reporting by the WSJ had some journalistic integrity, the editorials were far to the right. If I remember correctly, Murdoch financially supported Hillary Clinton over Barack Obama, but that’s as far as it went. Murdoch’s media ventures have been detrimental to American and British politics at best, but now it appears that Newscorp has committed criminal acts. If you think that bribing cops and hacking telephone calls is okay in order to get you your distorted view of the news, that’s your opinion. I think otherwise.

  3. Steve Robinson says:

    So, the Bancrofts are “Shocked, shocked!” to discover what Murdoch is all about. Spare me. It took a hacking scandal for the Bancrofts and others to discern that Murdoch is all about power and will do anything to attain it? What about hiring a passel of Republican presidential possibles as “commentators” on Fox News, so that they owe him for the exposure he provides? It’s nice to see the quntessential dragger-of-people-through-the-mud finally getting his turn to bathe in the slime, but what took everyone so long?

  4. NortonSmitty says:

    LAC, WSJ, WTF? THE voice of Wall Street from the Robber Baron thieves of the 1990’s to the Hedge Fund thieves of today LEFT WING? Rupert Murdock, the mouthpiece of the Corporatist Neo-Fascists that has done more to move this country to the Far Right by convincing idiots like you to vote against their own self-interests in the name of some Capitalist Utopian Vision that won’t be satisfied until your own children have to sell their kidneys (at whatever price the Invisible Hand of the Free Market deems fair) to put food in their bellies, that Rupert Murdoch is a Pinko?

    LAC, if I ever harbored any doubt that you are a jingo spouting mindless brain-dead bitter old senile idiot, they’re gone now buddy. Congratulations, you are the new Gold Standard of stupid.

  5. JR says:

    NortonSmitty, capitalists have never claimed to have the ability to create a utopia, it is the uber leftists, marxist/socialists, that have claimed to be able to create a perfect world. Ask the 35 million (low-ball estimate) murdered by the Lenin/Stalin crew how that “people’s paradise,” is going. About News of the World, it was a tabloid, not a medium known for its journalistic integrity. The outrage directed at News of the World, that it failed to abide by journalistic standards, is as humorous as if the same charges were lodged against TMZ.

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