Through The Fly's Eyes: Dow Jones

from Joseph Lazzaro of Theflyonthewall.com















Dow Jones' Board Takes Control Of Negotiations From Bancrofts

Although the initial analysis suggests that the decision by the Board of Directors of Dow Jones (DJ) to take over the negotiations with News Corp ( NWS) from the Bancroft family represents a development that is likely to speed any deal between the two, whether any deal comes to fruition remains an open question - due to the myriad of players and coalitions surrounding this most consequential of potential media deals, the instant-analysis of The Wall Street Journal notwithstanding.

The Wall Street Journal Wednesday night reported -- but cited no sources -- that the Board's move "is likely to speed any deal between News Corp. and Dow Jones," owner of The Wall Street Journal. Left unclarified is exactly why the board's Wednesday decision would speed any deal.

In a statement released after Wednesday's market close, the Dow Jones board of directors said it would "take the lead in addressing all aspects of the [News Corp] proposal and all other strategic alternatives, including remaining independent." Further, the board "reiterated that any transaction must include appropriate provisions with respect to journalistic and editorial independence and integrity."

Read one way, the above passage could mean that the board is taking the lead in addressing the News Corp proposal. Read another way it could also mean that the board is weighing other proposals. Wednesday night's Journal news story implied that the board's decision would speed any deal, if, in fact a deal is in the making, but the Journal did not state, nor offer sources, confirming that a DJ/News Corp deal was, in fact, in the making.

Meanwhile, General Electric (GE) and Pearson Plc Wednesday continued to discuss plans whereby the two would forward an alternate proposal to the Bancrofts (and now, presumably, to Dow Jones' board of directors) - a plan that would grant the Bancrofts a larger minority stake and a stronger editorial voice in the new entity.

In addition, late Wednesday Internet entrepreneur and MySpace Founder Brad Greenspan announced that he is leading an investment group seeking to take a non-controlling stake in Dow Jones, a proposal he called "an attractive alternative to the current options as a vehicle for maximizing shareholder value." Dow Jones closed Wednesday up $1.90 to $60.65, News Corp fell 8 cents to $23.60, GE declined 22 cents to $39.07.

Hence, currently the players on stage in this biggest-of-all 21st century media dramas to-date include a media giant, a potential new conglomerate / media partnership, a postmodern New Media player, and a board of directors with more shifting and secretive coalitions than the old Soviet Politburo.

Given the verifiable facts to-date, anyone who can at this juncture predict the ultimate shape and control of Dow Jones would have to be something of an analyst extraordinaire. Or clairvoyant.