Issues & Opinions

When attempting to transact business, whether selling a house, getting a tune-up, or engaging in high-stakes M&A, the responses received during the give-and-take don’t always help get to closure.

I’m not talking about the “No”. I’m talking about the “No, because…”.

The “…because…” isn’t always what it’s cracked up to be, and in many cases, isn’t even the truth. Among the many practices of the art of the deal, then, is finding a way to filter the wheat from the chaff. Getting to the truth is sometimes (not always) a prerequisite to getting to the answer, whichever way that answer goes.

Rupert Murdoch seems to be doing just that, according to today’s WSJ story, just in, entitled “Murdoch Sends Letter to Bancrofts“.

There’s been some noise about his offer being too low, but it’s been muted, and has primarily come from outside the controlling Bancroft clan and outside of Dow Jones entirely. The larger issue, at least the one everyone’s been banging on about, has been the presumed loss of editorial integrity which would come from News Corp ownership of the Wall Street Journal.

What better way to flush out the actual answer, then, than to make an offer like this?

In the letter, which was sent Saturday and distributed to family members on Monday morning, Mr. Murdoch offered to add a Bancroft family member to News Corp.’s 15-member board if the deal goes through. He also vowed to establish an independent editorial board to ensure the editorial integrity of The Wall Street Journal and Dow Jones’s other editorial operations. He did not raise News Corp.’s $60-per-share offer for the company, however.

Of course he didn’t raise the offer. Murdoch’s nowhere near the point in this transaction where he needs to start bidding against himself. Nobody, so far, has been able to muster the business logic needed to override the financial logic which allows him to pay well above the odds for the company.

Quite often, if not most of the time, when someone says “It’s not the money - it’s the principle”, a reasonable person can assume that, yes, in fact, it’s the money.

Murdoch’s latest action seems like a well crafted attempt to get to the real answer. If it’s solely a matter of principle, his proposal provides a compelling reason for the Bancrofts to reconsider. And if it’s not really principle at all, it could get them to admit that, and to propose a higher price themselves. Either way, he could be driving a wedge between the true purists who want to follow the family’s maxim “Never sell Grandpa’s paper.” and those, presumed to be the younger members of the family, who might feel otherwise.

While I’d guess (and have said before) that Murdoch would willingly pay more for Dow Jones, he doesn’t seem likely to do so blindly, or in a vacuum. The ball appears to be firmly in the Bancrofts’ court, within easy reach for a return.

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