Sources
This book is based primarily on firsthand reporting consisting of hundreds of interviews with Bancroft family members and advisers; Murdoch family members and advisers; current and former News Corp. executives; and current and former Dow Jones executives. My coverage of News Corp.'s takeover of Dow Jones began in the spring of 2007 as an assignment from the editors of the Wall Street Journal, where I worked for a decade and where I was the media reporter at the time of Rupert Murdoch's formal bid for Dow Jones. This book would not have been possible without the foundation of that reporting and the extraordinary effort of my fellow reporters and talented editors at the Journal. However, I re-reported this book in its entirety, and I had no financial ties to Dow Jones or News Corp. as I wrote it.
While I received cooperation from all of the significant players in the narrative, this is not an authorized account. It has not been vetted or cleared by News Corporation or Dow Jones.
Because the Journal's initial reporting on News Corp.'s offer for Dow Jones formed the basis of my knowledge of the events, I have listed the bulk of the paper's articles on the topic here, by date:
"News Corp. Duo Set to Lead Dow Jones as Zannino Resigns," December 7, 2007
"Bancrofts Bicker, Miss a Deadline, Lose Board Choice," November 7, 2007
"Dow Jones Didn't Get a Viable Rival Offer," September 8, 2007
"Member of Independent Dow Jones Panel Has Ties to News Corp.," August 3, 2007
"Murdoch Wins His Bid for Dow Jones—Bancroft Family Agrees to $5 Billion Offer After Deal on Fees—A New Owner for Journal," August 1, 2007
"Dow Jones Deal Gets Closer as Talks Turn to Fees—Fund Would Cover Some Family Costs to Gain Key Votes," July 31, 2007
"Bancrofts' Jockeying Over Murdoch Deal Goes Down to the Wire," July 30, 2007
"Bancroft Wrangling Intensifies—As Bid Deadline Looms for Dow Jones, Splits in the Family Remain," July 28, 2007
"Relative Uncertainty: As Sale Decision Nears, Family Split Persists—Murdoch Deal Pits Heirs Against Parents; Call for a 'Leap of Faith,'" July 25, 2007
"Dow Jones Board Member Quits in Protest—German Publishing Heir Cites News Corp. Deal; Net Falls 27% on Charges," July 20, 2007
"For Bancrofts, Decision Time Is Near on Sale of Dow Jones—News Corp. Seeks to Know 'Promptly' If Deal Is Supported," July 19, 2007
"SEC Plans Suit Against Dow Jones Director," July 19, 2007
"Dow Jones Board Approves Sale—Vote Could Pressure Family; Christopher Bancroft Leaves Meeting Early," July 18, 2007
"Dow Jones, News Corp. Set Deal—Tentative $5 Billion Pact Gets Board Vote Tonight; Family to Meet Thursday," July 17, 2007
"Key Bancroft Aims for a Long Shot—Second Family Member Scrambles to Stop Sale of Dow Jones to News Corp.," July 16, 2007
"Dow Jones Makes Late Push to Find Other Buyers," July 9, 2007
"Dow Jones Pact Would Protect Three Top Editors," July 3, 2007
"Bancroft Heir Pursues Alternative to Murdoch," June 29, 2007
"News Corp. Awaits Reply from Bancrofts," June 28, 2007
"News Corp. Nears Dow Jones Pact—Agreement on Protection of Editorial Independence Would Pave Way for Sale," June 26, 2007
"Dow Jones Deal Talks Intensify," June 25, 2007
"Dow Jones Board Takes Over Talks on Firm's Future—Deal with News Corp. Becomes More Likely; 'Fish or Cut Bait' Mood," June 21, 2007
"GE and Pearson Discuss Joint Bid for Dow Jones—Talks Signal Alternative to News Corp.'s Offer Could Be Taking Shape," June 18, 2007
"Dow Jones Scenarios Highlight Divide," June 14, 2007
"Dow Jones Moves to Cover Executives in Event of a Sale," June 8, 2007
"In Murdoch's Career, a Hand on the News," June 5, 2007
"Murdoch May Make Concessions, Up to a Limit, in Dow Jones Talks," June 4, 2007
"Family Dynamics: Behind the Bancrofts' Shift at Dow Jones," June 2, 2007
"Bancrofts Open Door to a Sale of Dow Jones," June 1, 2007
"Dow Jones Board Won't Act as Bancrofts Deliberate," May 17, 2007
"Dow Jones CEO Zannino: The Man in the Middle," May 14, 2007
"Dynasty's Dilemma: For Bancrofts, Dow Jones Offer Poses Challenge—Murdoch Bid Tests Family's Cohesion; Sell 'Grandpa's Paper'?" May 12, 2007
"Clearer Timeline of Murdoch Offer Emerges," May 10, 2007
"Dow Jones Ex-Chief Praises Family's Stance," May 8, 2007
"Ex-Dow Jones Executives Oppose Murdoch's Bid," May 7, 2007
"At Dow Jones, Focus Is on the Bancroft Family," May 3, 2007
"Key to Company's Fate Is the Bancroft Family; Firm 'No' or a 'Maybe'?" May 2, 2007
"Murdoch's Surprise Bid: $5 Billion for Dow Jones," May 2, 2007
PROLOGUE
My description of the party aboard Barry Diller's yacht is based on interviews with numerous party guests.
The history of the Bancroft family is based on extensive interviews with various members of the family as well as several books, including Lloyd Wendt's The Wall Street Journal: The Story of Dow Jones and the Nation's Business Newspaper (Skokie, IL: Rand McNally & Co., 1982), Richard Tofel's Restless Genius (New York: St. Martin's Press, 2009), and Jon Meacham's The Beginning of the Journey (New York: Dow Jones, 2002). In addition, a number of articles were useful, including Marshall Loeb, "Words to Profit By," Time, December 7, 1998; Stephen Foley, "A Tale of Wealth and Intrigue: The First Family of Wall Street," Independent, June 9, 2007; and Susan Pulliam, Dennis K. Berman, Matthew Karnitschnig, and Sarah Ellison, "For Bancrofts, Dow Jones Offer Poses Challenge," Wall Street Journal, May 12, 2007.
The Bancrofts' fear of becoming "just another rich family" was reiterated to me in several interviews with family members and initially appeared in Joseph Nocera, "At Dow Jones, It's AH About Family," New York Times, August 20, 2005.
Background on the Sulzbergers came from their friends and acquaintances. Other useful sources on this subject include Susan E. Tifft and Alex'S. Jones, The Trust: The Private and Powerful Family Behind the New York Times (Boston: Back Bay Books, 2000).
The history of the Murdoch family and Keith Murdoch's role in Gallipoli are based on interviews with Murdoch family members and longtime Murdoch family associates. Other useful sources on this subject include the National Library of Australia, "Despatches from Gallipoli; Scenes from a Remote War: Sir Keith Murdoch," http://www.nla.gov.au/gallipolidespatches/2-2-1-murdoch.html.
The influence of Murdoch's Sun in London is outlined in the National Readership Survey, http://www.nrs.co.uk.
CHAPTER 1
The Bancroft family trust structure was laid out for me by several family members and advisers. The most detailed newspaper article done on the trust structure was Matthew Karnitschnig, "Bancroft Trusts' Lawyers Hold Key to Dow Jones," Wall Street Journal, July 2, 2007.
To describe the ascension of Peter Kann and Karen House at Dow Jones, I interviewed current and former Dow Jones executives, as well as Kann and House, for whom I worked during much of my tenure at the Journal. In addition to those interviews, I found Vanity Fair's "In the Company of Sharks," by Robert Sam Anson (August 1997), useful for its description of that era as well as an artifact itself of the disdain with which most media watchers viewed Kann and House at the time. For details on Kann's history at the Journal, I used a collection of stories and memorabilia his former colleagues at the Journal assembled for him as a retirement gift.
Financial information on the company came from company filings and the reporting on Dow Jones's performance in various publications, including the Journal, the New York Times, and Fortune magazine.
CHAPTER 2
To describe Elisabeth Goth's campaign after her mother's death, I relied on interviews with Bancroft family members. In addition, Joseph Nocera's February 3, 1997, article in Fortune magazine, "Disgruntled Heiress Leads Revolt at Dow Jones," was indispensable. It not only reported Elisabeth Goth's unhappiness at the time, but it made news itself, as it was the first public accou
nt of Bancroft family unrest. Nocera's follow-up piece (with reporter associate Maria Atanasov), "Attention, Dow Jones: Ms. Goth Wants Results Now!" which appeared in Fortune on March 2, 1998, also proved useful.
The description of Chris Bancroft's wife was based on interviews with him as well as press articles at the time, including Paul Tharp and Zachery Kouwe, "A House Divided: Bancroft Heirs Split on Murdoch's $5B Offer," New York Post, May 4, 2007.
My description of Herbert Allen's Sun Valley conference was drawn from interviews with various people who have attended the conference, as well as several books that have reported on the atmosphere of the gathering, including Alice Schroeder, The Snowball: Warren Buffett and the Business of Life (New York: Bantam, 2008).
My account of the state of the Murdoch family at the time of the Murdochs' meeting with Jimmy Lee in Sun Valley was based on interviews with family members as well as Michael Wolff, "Fox Family Values," New York, August 17, 1998.
My characterization that the Murdoch children had reached a consensus that Lachlan was Murdoch's heir apparent was based on interviews with the chil dren as well as press accounts at the time, including Cathy Newman, "Murdoch Vows to Keep Up Cut-Price Newspaper War," Independent, November 13, 1997.
CHAPTER 3
The proposed change in Dow Jones's bylaws to lower the threshold at which Bancroft super-voting shares would convert to common shares is outlined in the company's 2005 proxy statement: http://www.sec.gov/Archives/edgar/data/29924/000119312505054765/ddef14a.htm.
Roy Hammer's comment to Fortune magazine appeared in this article: Julie Creswell, "Dow Jones: Does the Family Finally Want Out?" Fortune, May 16, 2005.
The decline in the Journal's revenues in the first quarter of 2005 is based on the company's annual report, "Value and Values," Dow Jones & Company Annual Report, 2005.
The jump in the Journal's stock price after Zannino's appointment was announced can be found in "Dow Jones and Company Incorporated (DJ) Daily Prices from 15-Dec-1986 to 13-Dec-2007," http://www.dj.com/InvestorRelations/Overview.html.
My description of the correspondence between Jim Lowell, the lawyers at Hemenway & Barnes, and the Bancrofts, and the ensuing e-mail exchange among the Bancroft family members, is based on interviews with family members and advisers and e-mails I reviewed from that time.
Wendi Murdoch's role at News Corp. and her history leading up to her marriage to Rupert Murdoch were outlined in John Lippman, Leslie Chang, and Robert Frank, "Meet Wendi Deng: The Boss's Wife Has Influence at News Corp.," Wall Street Journal, November 1, 2000.
CHAPTER 4
My description of Richard Zannino's appointment as CEO was based on numerous interviews with current and former Dow Jones executives. Zannino's quote "I know what will happen if we screw up the Journal" appeared in Brian Steinberg and Joe Hagan, "Dow Jones Taps Richard Zannino As New CEO," Wall Street Journal, January 4, 2006.
My description of Lachlan's departure from News Corp. was based on interviews with current and former News Corp. employees. In addition, I found several articles from that time to be useful, including Steve Fishman, "The Boy Who Wouldn't Be King," New York, September 11, 2005.
Anna Murdoch's description of her recovery from her divorce as "coming out of a deep mental illness" appeared in Australian Women's Weekly in July 2001 and was reported on extensively by the UK press, including in Christopher Zinn, "Anna Murdoch Mann: 'He Was Hard, Ruthless and Determined,'" Independent, July 27, 2001.
CHAPTER 5
My description of Billy Cox III's role as his cousin Elisabeth's coconspirator was based on interviews with a number of family members and family advisers who remembered that period well. Because Billy's comments in the press caused so much angst within his family, I also relied on several articles, including Joseph Nocera's previously cited "Attention, Dow Jones."
My description of the differences between the Bancroft family's trust structure and the Sulzberger family's trust structure was based on numerous interviews with advisers to both of the families as well as public company filings from the New York Times and Dow Jones. The most detailed discussion of the Sulzberger family's trust appears in Tifft and Jones, The Trust.
My description of the state of the newspaper industry at the time of Rich Zannino's conversation with Jimmy Lee is based on the totality of negative news coming from newspaper publishers at that time as outlined in their own SEC filings and circulation figures, as well as "The State of the News Media 2006: An Annual Report on American Journalism," Project for Excellence in Journalism, http://www.stateofthemedia.org/2006.
My description of Dow Jones's interest in Business Wire and Warren Buffett's subsequent purchase of the business was drawn from interviews with former Dow Jones executives as well as press accounts of Buffett's purchase, including Dan Fost, "Buffett Seals the Deal: Business Wire Is Latest Addition to Billionaire Investor's Portfolio," San Francisco Chronicle, January 18, 2006.
CHAPTER 6
My description of Tony Ridder's attempt to appease investor Bruce Sherman before caving to pressure to sell Knight Ridder is based on Knight Ridder's own filings, including a November 10, 2005, 13D filing (http://yahoo.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTMLl?SessionID= VcxtINVjuQgXtfT&ID=4007412), as well as press accounts, including Charles Layton, "Sherman's March," American Journalism Review, February/March 2006.
Hassan Elmasry's dissatisfaction with the New York Times Company's management was outlined in an article I wrote for the Journal in 2007: "How a Money Manager Battled New York Times: Mr. Elmasry Escalated Efforts Over Two Years; Letters to the Chairman," Wall Street Journal, March 21, 2007.
CHAPTER 7
John Malone's exchange of News Corp. shares for control of DirecTV was outlined by News Corp. in a company announcement, "News Corporation Completes Exchange Agreement with Liberty Media Corporation: Largest Buyback in Company's History," February 27, 2008, http://www.newscorp.com/news/news_370.html.
Gordon Crovitz's note to Journal readers appeared in L. Gordon Crovitz, "A Report to Our Readers: Welcome to the Newspaper of Tomorrow," Wall Street Journal, January 2, 2007.
Marcus Brauchli's quote about Journal 3.0 appeared in Howard Kurtz, "Wall Street Journal Names New Editor," Washington Post, April 19, 2007.
The reception of Journal 3.0 in Dow Jones's executive suite was outlined to me by Rich Zannino and several other Dow Jones board members. The reception in the blogosphere was outlined in Edward B. Colby, "'Shrinky-Dink' WSJ Debuts, Bloggers Muse," Columbia Journalism Review, January 2, 2007.
Paul Dacre's salary as the editor of the Daily Mail is outlined in the company's annual report, "Daily Mail and General Trust plc Annual Report," September 28, 2008, http://www.dmgt.co.uk/investorrelations/reportsandpresentations.
CHAPTER 10
My description of the fissures in the Bancroft family during the summer of 2007 are based primarily on interviews with individual family members. Some of those divisions were initially reported by me and my colleagues at the Wall Street Journal at the time, including in Matthew Karnitschnig, Sarah Ellison, and Susan Pulliam, "Bancroft Wrangling Intensifies: As Bid Deadline Looms for Dow Jones, Splits in the Family Remain," Wall Street Journal, July 28, 2007.
David Faber's initial break of the News Corp. offer for Dow Jones appeared on CNBC Morning Call: "CNBC's David Faber Reports News Corp Made Unsolicited $60 a Share All Cash Offer for Dow Jones," May 1, 2007.
The Journal article by Martin Peers, prepared prior to the Faber story and released afterward, appeared on Dow Jones Newswires, "Dow Jones Receives $60/Share News Corp Bid," May 1, 2007.
The Bancroft family's initial statement that they were "evaluating the proposal" was released by Dow Jones the day the offer became public: "Dow Jones Confirms Receipt of Unsolicited Acquisition Proposal from News Corporation," May 1, 2007, http://penplusbytes.blogspot.com/2007/05/dow-jones-confirms-receipt-of.html.
The large turnover in Dow Jones's shares on May 1 was reported widely the day of the offe
r and is verifiable on a number of free online databases. The turnover was also reported in the Journal itself: Susan Pulliam, Gregory Zuckerman, and Karen Richardson, "Dow Jones: The Premium Question—Murdoch's Lofty Offer Could Deter Rivals; Buffett Unlikely to Bid," Wall Street Journal, May 2, 2007.
Andrew Ross Sorkin's piece on Murdoch's offer appeared in "What to Do When Rupert Calls?" New York Times, May 6, 2007.
CHAPTER 11
The family's statement that it would "consider strategic alternatives available to the company, including the News Corporation proposal," initially appeared on WSJ.com, "Bancrofts' Statement on Dow Jones Bid," May 31, 2007.
For my account of the conference call in which Zannino, Crovitz, the Bancroft family board members, and Dow Jones editors initially discussed an editorial independence agreement, I relied on interviews with the participants. Harold Evans's recollection of Murdoch's dismissal of the Times of London's editorial agreement initially appeared in Evans's book Good Times, Bad Times (Philadelphia: Coronet Books, 1984).
CHAPTER 12
For my description of Marty Lipton, I relied on interviews with people who have worked with him as well as his corporate biography, "Martin Lipton (Partner, Corporate)," http://www.wlrk.com/Page.cfm/Thread/Attorneys/SubThread/Search/Name/Lipton%2C%20Martin (Wachtell, Lipton, Rosen & Katz Web site).
My account of Rupert Murdoch's experience in China is based on a variety of interviews with current and former News Corp. employees, including Peter Stothard, the former editor of the Times of London. I also relied on several press accounts, including William Shawcross, "Murdoch's New Life," Vanity Fair, October 1999. Particularly useful was Bruce Dover, Rupert's Adventures in China: How Murdoch Lost a Fortune and Found a Wife (Edinburgh: Mainstream Publishing Co., 2008).
War at the Wall Street Journal Page 30
