followthemedia.com - a knowledge base for media professionals
Big Business Follow-up
Recently in Big Business

Wings over Bulgaria
...Emmis International announced its Bulgarian expansion...

Is There Anyone Out There Who Still Thinks This Is All Cyclical?
A media analyst for Credit Suisse put the cat among the pigeons...

Liquidity, liquidity, come, please, to my door
The final billion euro media deal of the year...

Send ftm Your News!!
news@followthemedia.com

At The End Of The Day It Was This Simple: Dow Jones Just Isn’t Worth $60 A Share To Anyone Else And Rupert Murdoch Is The Smartest Media Business Guy Around

The Bancroft family apparently has seen the light – mostly with $ signs in their eyes – and Rupert Murdoch has won his $60 a share battle for Dow Jones. There are still “and” and “buts” that might cause last-minute problems, but it appears the deal is basically done.

With DJ and News Corp. board meetings going on Monday night, past our deadline, ftm will offer its full analysis in Thursday’s edition after the dust has fully cleared, but here are three thoughts:

  • Murdoch’s bid was a masterpiece – so high that any other public company, or the huge equity bankers, who thought of muscling in just couldn’t do so because the numbers don’t make financial sense at that price no matter what cost cutting is employed later, so Murdoch kept the vultures at bay and financially he can afford to take a hit for a few years with an investment that ultimately will pay big dividends.
  • For all of the pontification by the Bancrofts in the past about the family heirloom, Murdoch understood human nature only too well -- $60 is a lot more than $36 and with valuations of media companies being what they are today one just cannot envisage when Dow Jones on its own merits without a bid would ever get near to that Murdoch bid price. If ever there was a time to take the money and run this was it. And, with some kicking and screaming, that’s exactly what the Bancrofts did.
  • The Bancrofts may have outsmarted themselves right into Murdoch’s pocket. They had run up at least $30 million worth of legal and financial fees from various advisers as they discussed the bid. At nearly the last moment it was brought to their attention that if they turned down the deal they were stuck with those professional charges – and that’s a lot of money some of them don’t have. If they accepted then either Dow Jones, or Murdoch or some combination of the two would probably pick up those financial pieces.  Just the right incentive to close the deal.

So, this family that has been in the business of financial journalism for so many years finally learned their ultimate lesson – money really does speak louder than words.  – July 31, 2007


Keywords: Dow Jones, Rupert Murdoch

ftm Knowledge

Flying Through Turbulence – Media in the New EU Member States

ftm reports on media in the 12 newest EU Member States. Will media find clear air or more turbulence? 98 pages PDF file (February 2007)

Free to ftm members and others from €39

See contents

Order

Rupert Murdoch - The Media Mogul

From Australia to the San Antonio, Texas tabloid to News Corp and News International, Mr. Murdoch fascinates all media watchers. Included is up to date information on the Dow Jones speculation and real deals, too. When Murdoch talks, the media world listens, and he has a lot to say about newspapers, broadcasting and new media. 42 pages PDF (June 2007)
Free to ftm members, others from €39
Order


Media Measurement Moves Forward and Everywhere

Includes: mobile and internet metrics, electronic measurement systems and device descriptions, RAJAR (UK) debate, with comments. 57 pages PDF (May 2007)
Free to ftm members, others from €39

See what's inside

Order

copyright ©2004-2007 ftm partners, unless otherwise noted Contact UsSponsor ftm