TA: Are Murdoch and News Corp. part of a broader trend in the American media or is News Corp. uniquely problematic, in your view?
JO: I think it’s the worst case of debased journalism…
TA: Murdoch, if he were here, wouldn’t he say you’re arguing against capitalism?
JO: No…I think I actually said in my statement that he’s free to run his newspapers anyway he wants. I’m just arguing that as a shareholder of Dow Jones, I don’t want him running Dow Jones’s publications in that fashion.
TA: Sure, but the market says News Corp. is worth $70 billion, and Dow Jones is worth $3 billion. End of discussion?
JO: End of discussion if the shareholders of the $3 billion asset are willing to sell out just because they can get a higher price. If they have no commitment to honest and accurate journalism, then the dollar rules. I’m arguing that there’s a moral issue here. Rupert Murdoch…I admire his business skills, but I despise his journalistic practices, and even if I admire him, I’m concerned, and I think the Bancroft family should be concerned, about what kind of a home News Corp. makes for Dow Jones long-term. If we sell the company to Rupert Murdoch at age 76, this is not a long-term strategy. And, not only do we not know who the successor controlling shareholder will be at News Corp., we don’t know who would be the next chairman and chief executive. So I don’t see selling to News Corp. as finding a very good home for Dow Jones.
I worked for the company for thirty-three years. I worry about its future and I worry about its people. …This business of human assets is a very important thing because Murdoch’s theory seems to be, “We can replace you.” You don’t keep great writers that way.
TA: To what extent do you think the Bancrofts, the Dow Jones board and previous management under Peter Kann are responsible for the company’s current predicament?
JO: I think it’s fair to say that Dow Jones management made a big mistake in not bidding high when the predecessor of CNBC (1) was up for sale. We should have gone for that no matter what it cost. We offered $115 million. (The difference from the winning General Electric bid) was peanuts. There was no vision or courage to go for a really important diversification. Then there was vision and courage—but not the competence—to make the Telerate (2) deal work. However, we did a lot of other things right and great.
TA: The dividend was always considered to be extremely high for a company of Dow Jones’s size. What do you think?
JO: It was a high percentage of payout over the years. It was true, though, that in 2000 when the earnings went to $3.20 dollars a share, the dividend didn’t move. It’s been a dollar a share. It’s not as if they’ve been cranking it up to get every last dollar out of the company. It’s very high now because they’re just barely making it (financially). But in the years when the percentage was high, the cash flow was strong, and we had the money for everything we needed. There were very few capital things we didn’t do because we were told we had to pay the dividend.
…The Bancroft family, however, was afraid of major debt. My father and I built the Ottaway newspapers on debt. We might have done things the company should have done earlier on if the company didn’t have such an allergy to debt. The (Bancrofts’) theory was interesting; it was a matter of principle: “We are a business-news company. The WSJ is reporting on banks and banking; we don’t want to be beholden to any banks because our reporters are covering [them].” They didn’t want to buy any government-regulated company like a radio station because they didn’t want anything regulated by the government.
TA: Knowing the Bancrofts, what do you think they’re going to do?