Murdoch Bid on Dow Jones Advances

As with prenuptial agreements in marriages, attorneys and other experts know every possible way to get around what seems to be cast in stone. However, in the case of newspapers, the past 100 years have been the story of family-owned papers selling to newspaper groups. After a generation or two, especially if family members are not actively involved in the paper, it comes to represent primarily an annuity for the family. So long as it was an annuity with high returns, it was easy to also feel good about also contributing to maintaining a free press. But once it doesn't look as good as it once did, once somebody else wants to pay a premium to buy it or once family members can see better use for their money based on their own personal needs, it slips away.

This has occurred in many family-owned businesses over time. In the end, not all family members agree (years ago when I worked at The Chicago Sun-Times, half-brothers bickered and the paper was sold so that one brother could finance the movie "Revenge of the Nerds".) In addition, outside groups are now more likely to start buying shares and eventually own enough to force changes in ownership. Another factor is that newspapers do not have the clout they once did because there are more many sources of news and information. Family trusts in the end fall apart when the family in part or whole decides to acquiesce, its public pronouncements notwithstanding. Not all family trusts fit this category, but you can see the strain that has been put upon them and also put yourself in their shoes.

No one thought that the Bancrofts would ever give up Dow-Jones but obviously the money was too hard to resist. In many instances, the second and third generations of many newspaper families have not been interested in carrying on the business. One reason is that news business is not the cash cow it once was. As for the Grahams and the Times, those family members are very involved in the daily operation of their organizations so I do not foresee anyone in those families giving up on the franchise. The Bancrofts never were. And other than the late Otis Chandler, neither were most of the Chandler family members who owned the Los Angeles Times. One of the things I admire about Murdoch and his family is that they are committed to the business and that he loves newspapers and is willing to invest in the Journal.