War at the Wall Street Journal (40 page)

 

C
HAPTER
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.

 

C
HAPTER
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.

 

C
HAPTER 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.

 

C
HAPTER
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.

 

C
HAPTER
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
.

 

C
HAPTER
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 offer 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.

 

C
HAPTER
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).

 

C
HAPTER
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).

James Murdoch's speech attacking the Falun Gong was widely reported at the time in a number of newspapers and criticized in the
Wall Street Journal:
Tunku Varadarajan, "Bad Company: Rupert Murdoch and His Son Genuflect Before Chinese Communists," March 26, 2001.

 

C
HAPTER
13

The
Journal
story outlining Murdoch's relationship with his editors throughout his career appeared as "In Murdoch's Career, a Hand on the News: His Aggressive Style Can Blur Boundaries; 'Buck Stops with Me,'" by Steve Stecklow and Aaron O. Patrick in London, Martin Peers in Sydney, Australia, and Andrew Higgins in New York (June 5, 2007).

Murdoch's frustration with the delay in receiving an editorial independence proposal from the Bancroft family was relayed to me by a number of his associates. His comments to Reuters appeared under the headline "Murdoch: No Plans to Raise Dow Jones Bid" by Gabriela Baczynska (June 27, 2007).

Murdoch's unscripted interview with the
New York Times
appeared under the headline "Murdoch on Owning the Wall Street Journal," by Richard Siklos and Andrew Ross Sorkin, May 4, 2007.

 

C
HAPTER
15

For Murdoch's lawyer's assertion that the mogul looks at reporters "as furniture," I relied on Sarah Bernard and Aaron Latham, "My God, What Trouble You Could Cause!"
New York,
July 6, 2008.

The
New York Times
and the
Washington Post
both covered the Minneapolis bridge collapse on their front pages: Libby Sander and Susan Saulny; Pat Borzi, Karron Skog, and Carla Baranauckas contributed reporting, "Bridge Failure in Minnesota Kills 7 People,"
New York Times,
August 2, 2007; and Joe Kimball and Elizabeth Williamson, "Interstate Bridge Collapses into Mississippi River in Minneapolis,"
Washington Post,
August 2, 2007. The same day, the
Journal
noted the collapse in a brief item in its "World-Wide" column for non-business news.

The
Journal
followed a day after with a story exploring the collapse's implications for infrastructure in the United States: Christoper Conkey, Daniel Machalaba, and Douglas Belkin, "Bridge Collapse Could Spur Infrastructure Fixes," August 3, 2007.

 

C
HAPTER
17

Murdoch publicly discussed his view that he wanted to make WSJ.com free at an investor conference in September 2007. His comments were widely reported, including in the
Journal:
Sarah Ellison, "Murdoch's Choice: Paid or Free for WSJ.com?" September 19, 2007.

 

C
HAPTER
18

My account of the dinner prior to the bureau chiefs' meeting is based primarily on my own observations of the cocktail party and dinner on the eve of the meeting. My account of the meeting itself is based on interviews with bureau chiefs and others who attended the meeting.

In addition, I relied on various internal
Wall Street Journal
memos, including a December 17, 2007, e-mail—"Bureau Chiefs' Meeting Agenda"—from Donna Davis to the
Journal
's bureau chiefs.

 

C
HAPTER
20

I spent April 21, 2008, with Rupert Murdoch. Most of the events described in this chapter are based on my own observations of that day.

The dimensions of Murdoch's Boeing Business Jet were taken from the Boeing Business Jets Web site,
http://www.boeing.com/commercial/bbj
.

The circumstances of Rich Zannino's departure from Dow Jones were relayed to me by both Zannino and Murdoch and a number of current News Corp. executives and former Dow Jones executives. Murdoch's comment that he has "taken up offers like that in the past" came from an interview I conducted with Murdoch.

Murdoch commented on the
Journal's
front page that day (April 21, 2008), including on the article "Latest Attacks Roil Democrats."

The
Journal
's editorial coverage of Vincent Foster spanned several articles, including "Who Is Vincent Foster?" June 17, 1993.

Foster's note about the
Journal
editors was widely reported at the time, including in Jason DeParle, "A Life Undone—A Special Report; Portrait of a White House Aide Ensnared by His Perfectionism,"
New York Times,
August 22, 1993.

Andrew Neil's account of his editorship at the
Sunday Times
is outlined extensively in his book
Full Disclosure
(London: Macmillan Publishers Ltd., 1996).