You can’t tell the players without a scorecard, and today The Audit will spell out where the economic interests of business-side and news-side executives at Dow Jones & Co. and its prized asset, The Wall Street Journal, stand in regard to the News Corp. bid.
Basically, the interests of key figures both at DJ and, unusually, at the WSJ are geared toward a sale, and not just a sale, but a sale to News Corp.
Top Wall Street Journal editors are in an especially tough, I would say, unique, position. They must cover the deal even-handedly, even though many of them fear News Corp. would wreck their paper. On the other hand, they also own stock and options that suddenly have a lot of additional value, sometimes millions of dollars more, thanks to the offer. That value collapses if News Corp. goes away.
Now, The Audit has come upon a draft document showing news executives could have other reasons to like a News Corp. deal.
Marked “privileged and confidential” and dated June 12, the draft sets out a structure by which Dow Jones’s controlling Bancroft family at one point sought to insulate the Journal editorially in the event of a sale to News Corp. Prepared by Wachtell, Lipton, Rosen & Katz, a high-profile New York law firm known for its deal expertise, its purpose is stated here:
As has been publicly stated, the Family is only willing to pursue negotiations of a transaction if and when the Family is satisfied that a structure can be developed and implemented that ensures the level of commitment to editorial independence and integrity and journalistic freedom that is the hallmark of DJ.
As reported elsewhere, the Bancrofts wanted DJ to be a separate (if wholly owned) entity within News Corp., controlled by a 12-member board including two family designees and three mutually appointed independent journalism experts. A (now-jettisoned) Special Committee on Editorial and Journalistic Independence and Integrity, the five non-News Corp. directors, would have had sole right to hire and fire “Essential Journalistic Officeholders.”
Not reported elsewhere: the arrangement would have guaranteed the top jobs of four people by name: Gordon Crovitz, the Journal’s publisher; Marcus Brauchli, the new managing editor; Paul Gigot, editorial page editor; and Neal Lipshutz, managing editor of Dow Jones Newswires. Known as “incumbent Essential Journalistic Officeholders,” these four “would be offered the opportunity to continue in his positions following closing.”
I don’t want to make too much of the document because it’s a draft and the language and contemplated structure have changed substantially in a week. The special committee has been replaced by a different and wholly independent compliance panel, for instance. But it represents what the Bancrofts wanted at one point. What’s more, as the Journal reports this morning, the latest known version continues to provide unspecified job protections for editors.
The Bancrofts’ editorial proposal calls for the establishment of a special committee to enforce a set of editorial principles News Corp. would be expected to adhere to, according to a family spokesman. It also includes protections for top editors and provisions to enforce the agreement. These elements were included in earlier drafts as well, and it wasn’t immediately clear how the version submitted to the Dow Jones board had been revised.
A family spokesman tells The Audit that the family is not publicly spelling out whatever protections are contemplated.
He also notes that if the family isn’t convinced the Journal’s editorial integrity will be permanently protected, “there won’t be a deal” with anyone.
A couple words about guaranteed jobs, if those are still on the table. For one thing, Crovitz is the paper’s top officer as it covers the deal, so that’s troubling. Second, Brauchli is the top editor. True, he has handed the task of overseeing deal coverage to his predecessor, Paul Steiger, but he remains the boss.