Skip to comments.Shaking the Bancroft family tree (Dow Jones money trail)
Posted on 05/15/2007 4:37:52 AM PDT by abb
(Fortune Magazine) -- The one-stoplight town of Carrizozo, N.M., is a dusty, tumbleweed-strewn place where you can ask the sheriff to pass the hot sauce at the 4 Winds diner. It may seem an unlikely venue to look for insights into the battle for Dow Jones, but tucked away in the squat courthouse are 12 thick folders that shed light on the family dynamics that may decide the fate of Rupert Murdoch's bid for the company.
Jacqueline Spencer Morgan, who married Hugh Bancroft Jr. in 1948, spread millions of dollars around this county seat and the rugged land of Lincoln County, her home for roughly 50 years. The pool at the community center, the golf course and the Spencer Theater, which rises from a rolling meadow, were all paid for in part with a steady flow of Dow Jones dividends. (Hugh Bancroft Jr. was a grandson of Clarence W. Barron, who purchased Dow Jones in 1902.)
Payments like hers have supported the entire Bancroft family for decades but, critics say, have starved Dow Jones of capital to grow its business. (Members of the family control 64.2 percent of Dow Jones, primarily through class B shares, each of which has ten times the voting power of a class A share.)
Dividends, which in some years exceeded the company's profits (see chart), lulled the clan's senior members into supporting Dow Jones management. Last year, according to a Lehman Brothers report, the company paid out $83.2 million in dividends while earning (not including special items) $81.6 million in profits.
(Excerpt) Read more at money.cnn.com ...
Murdoch is using the carrot and the stick....everyone thi nks that the coming Fox Business channel is a threat to CNBC, which it is..but since a cable channel that focuses on data can’t stand alone..it needs a website to go with it...the website for the FoxBusiness channel can also be a weapon against the WSJ.com...I suspect that this whole issue is being carefully staged to allow the Bancroft family time to “appear” to consider the ramifications of the sale...
Bancrofts Stay Cool to Murdoch
Family Declines to Respond
To Latest Meeting Request;
Deal Pitch Gets New Twist
By MATTHEW KARNITSCHNIG
May 15, 2007; Page A3
Bancroft family members convened yesterday by conference call to discuss Rupert Murdoch’s latest attempt to woo them into accepting News Corp.’s $5 billion bid for Dow Jones & Co.
But the family, which controls about 64% of Dow Jones’s shareholder voting power, didn’t respond to Mr. Murdoch’s latest push for a face-to-face meeting, leaving continued doubts about his chances of winning enough support to gain control of the company.
In his latest letter, sent to family members Friday, Mr. Murdoch made a series of commitments, including giving the Bancrofts a seat on News Corp.’s board and pledging to safeguard the editorial integrity of The Wall Street Journal and other Dow Jones editorial properties. He sought to address a key concern of the family: the continued editorial independence of The Wall Street Journal. Family members had not responded to an earlier request for a meeting. (Read the letter6.)
Mr. Murdoch portrayed himself as a worthy steward of Dow Jones’s journalistic legacy, with the business acumen to ensure its future. He spoke both personally — invoking his father, his children and his own devotion to newspapers — and in business terms, promising the capital to expand farther and faster overseas and online.
The News Corp. chairman stopped short of raising the $60-a-share offer for Dow Jones, but asked for a meeting with the family and Dow Jones directors and employees so he could make his case directly.
A Dow Jones spokesman declined to comment on the letter. Michael B. Elefante, a Dow Jones director and partner at Boston-based law firm Hemenway & Barnes who represents much of the Bancrofts’ holdings, couldn’t be reached.
Mr. Murdoch’s letter, with its specific proposals, serves to heighten pressure on family members and keep them discussing the offer two weeks after its existence became public instead of just walking away. It could give members of the extended Bancroft family who don’t want to categorically resist the offer additional time to make their case to their relatives.
I think it’s kabuki....he’ll add a few $$$ to the offer, and they’ll sell..my other theory..they’d like to do a tax-free exchange with NewsCorp stock..( to defer the HUGE capital gains liability) but Murdock may not want to have them as such a large minority shareholder block..IOW, it’s NOT that the deal isn’t going to happen, rather, this si about at what price and terms.
Lol, it ain’t as if the Bancroft clan isn’t in for the money. The theory that they’re holding out on principle got blown to sh!t by the Fortune mag article.
Btw, just sent all the WSJ reporters who’ve been working on this story an email asking when they’re gonna cover the dividend angle.
Pampered trust babies with ravenous appetites that make buzzards blush hungrily fight over a dead corpse. A perfect story for DinoMedia DeathWatchers. :)
They make the best Cherry Cider there.
New Mexico, Colorado, Idaho, Montana, Wyoming, S and N California have an infestation of these super rich people who inherited the family business. They set up these two tier stock plans and live like lords and ladies in their country manors. Often they control local politics, news papers and other areas to keep what they do under a blanket.
“Payments like hers have supported the entire Bancroft family for decades but, critics say, have starved Dow Jones of capital to grow its business. (Members of the family control 64.2 percent of Dow Jones, primarily through class B shares, each of which has ten times the voting power of a class A share.)
Dividends, which in some years exceeded the company’s profits (see chart), lulled the clan’s senior members into supporting Dow Jones management. Last year, according to a Lehman Brothers report, the company paid out $83.2 million in dividends while earning (not including special items) $81.6 million in profits.”
Montana must sport trust babies per capita. In a front page above-the-fold story local fishwrap just got done scolding Wyoming again for its supposed nasty frontier mentality regarding oil and gas development while praising Montana for its more nuanced civilized (eg do nothing) approach to energy development.
Maybe a sport of hunting trust babies would be appropiate.
One of the trust babys primary instincts is the herd instinct. Our domesticated trust babies are wild animals at heart and have a strong herd instinct. Herd life is not a democracy. Each herd has a leader. When the herd is threatened, she decides which direction and how far the herd will run. This herd leader has unquestioned authority. Trust babies feel safe with this arrangement and become nervous when they dont know whos in charge.