The Wall Street Journal’s news pages are notoriously liberal not in sync with the right-wing stance of its editorial pages. But ever since Rupert Murdoch bought the Journal’s parent company, Dow Jones, many have wondered if that might change. The place of Barack Obama’s picture just above the best story ever salacious tale of sex and drugs at the Department of the Interior will give them little reassurance that conservative politics aren’t playing a role in the news department. Surrounded by police, walking on the sidewalk, Barack glancing over his shoulder—well, it looks more than a little like a perp walk picture. As it turns out, the picture has nothing to do with the headline. Barack was just going to an appearance on David Letterman.

On a related note: who would have ever suspected that working for the Department of the Interior could be so much fun?

The last chapter of Kate Kelly’s Wall Street Journal epic on the decline and fall of Bear Stearns tells us that the “hurried deal” to keep Bear Stearns out of bankruptcy included a “loophole” that gave Bear Stearns investors leverage to seek a higher price. By now this story of the loophole is well-known, thanks in part to a New York Times front page story that first reported it. In time this story is likely to harden into conventional wisdom, especially now that it’s been endorsed by both the Times and the Journal.

Unfortunately, the story probably isn’t true.

Reporters and editors at The Wall Street Journal, Barron’s, Marketwatch and Dow Jones Newswires received an email this afternoon telling them that they’ll likely be moving up to the News Corp headquarters in midtown next year.

While some media watchers will no doubt bemoan the move as further endangering the independence of the Journal, our informal survey says the newsroom is divided on the move. The so-called “Park Slope lefty” contingent dreads the move, partly because it will lengthen the commute from Brooklyn. The “Westchester family” contingent welcomes it as it brings them closer to Grand Central Station.

WSJ, Dow Jones, Marketwatch, Barron’s to move to Manhattan in 2009 [Talking Biz News]

The announcement last night that key Murdoch aide Robert J. Thomson, who had been charged with selecting the next top editor of The Wall Street Journal , had pulled a Dick Cheney and selected himself, will have many speculating about the future of the Journal.

But why speculate when the evidence is right on the front page of the Wall Street Journal? Today’s front page shows that the worst fears of Journal watchers—turning the Journal into the New York Post or even the Sun—haven’t come to pass. But there does seem to be a shift in focus. Newspapers communicate their image of what is important with their front pages. And the front page story is a prized win for reporters, conveying prestige among colleagues. A few months ago the news desk at the Journal was split between general news and business news, and business news seems to be losing some of its grip on the paper.

Take a look at what’s on the Journal’s front page. Today there are six stories. The top billing is giving to the story of Ted Kennedy’s brain tumor. The two other above the fold stories are about the quake in China and the US military. Below the fold we have a story about doping scandals in the Olympics. Of these, only the military story—they plan to use more alternate fuels—has a solid business angle. The rest are general news stories. Murdoch, who is said to favor more general news more prominently placed in the Journal, must be pleased.

The “What’s News” section continues to lead with business and finance news shorts. For now.

Alright, this is surely jumping the gun and I’m probably going to take it back by sooner rather than later (my money’s on this afternoon) but right now, what I’m saying is: the new Wall Street Journal rocks, specifically Page One. Yesterday it was an article on an 150 women taking part in an Assassin-inspired game of competitive knitting (“I got the sock. I’m dead.”), today it’s a piece the trials and tribulations of putting on a good Nativity scene this holiday season, with a particular emphasis on the issue of animals who are stealing the show from their human co-stars with hijinks so hilarious I’m not entirely convinced they were unplanned.

In Mount Laurel, New Jersey, M and J were headed off to Bethlehem to do their thing when the donkey Mary was riding freaked out and took off. Joe jumped on the ass and tried to stop him but fell off, got caught in the reins, and was dragged for several hundred feet. At First United Methodist Church in Tuckerton, NJ, a camel ate the set. In Orange County, California, at the Crystal Cathedral, a donkey stepped on Joseph’s foot and broke his toe. At Mount Olives Lutheran church in Mission Viejo, CA, rehearsals got held up for over an hour because two goats were screwing like animals (“They were just acting very inappropriately,” Diane Girard, a co-coordinator of the program said. “We had to break it up.”).

What does any of this have to do with business? Don’t know, don’t care. At all. Maybe I’m just a Jew getting into the Christmas spirit, maybe this article just has me fondly thinking about the time Joseph wrestled Larry to the ground and dislodged a pubic hair from his throat that had been stuck in there for days. I don’t know what it is. I just know I like it, and want it to continue. (Thinking ahead for the coming year: how to deal with the ignorant fucks (that phrase should be in the lede) who tell you you’ve “got some schmutz” on your forehead on Ash Wednesday? The deadly sport of Canasta? These are just for instances, nobody’s saying they’re going to be used, I’m just trying to get a dialogue going, and you know the ‘Journal’ likes to come around these parts for story ideas, anyway.)

Awry in a Manger: It Takes a Miracle To Stage This Play [WSJ]

The Wall Street Journal only ran a tiny thumbnail of the Bernanke-as-sheriff cartoon you see at left, that some graphics guy obviously worked really hard on, next to this morning’s recession story, and only on the site’s main page? If you’re going to be the New York Post under a fake name, you don’t just dip your toes in the water, you fucking own it. Next time we want to see the tramp stamp alongside the article in full-size, with a click to enlarge option.

On the other hand, bravo to whoever had the idea to put a story about men who dye their hair on A1. Good to see someone came to work today.

Meaning that more people are reading the Journal for less time, at least online, following the Murdoch print media philosophy of more eyes, less ink (we would have also accepted: “words are offensive,” or “who likes to read anyway?”). Maybe it’s that people turned away from market news in July the same way you can’t stare at a train wreck or maybe it was the Journal’s new emphasis on less-reader-intensive celebrity nipple slips, but monthly numbers suggest a definite Pre-Post-erization (take a second to wrap your head around that term) of the now slightly less sacrosanct WSJ.

Editor & Publisher released its monthly traffic numbers for online newspapers for the month of July. Compared to May, when the glacial progression of the Murdoch buyout process was really kicking off, the Wall Street Journal in July was being read by more people for 2 fewer minutes on average per user per month. It was being read by 3% more people for 17% less time. Ok Rupert, you win.

The order of the top five online publications ranked by traffic remained static from May to July, with the Journal rounding out that club at number five. The online papers read more than the Journal are the NYTimes, USATODAY, Washington Post and LA Times (in that order). The top three all experienced greater traffic spikes than the WSJ from May to July and, wait a second…all experienced declines in the average time spent on the site per user which means that (you heard it on DB first) Rupert Murdoch is going to buy the NYTimes, USATODAY and Washington Post. The world’s online print media is powerless to resist its reduction to large badly-punned inappropriate titles. Surprisingly, more people trafficked online newpapers in July than May, which confirms that suspicion that the people on vacation (your bosses) weren’t reading online papers anyway (you knew your MD was illiterate, strangely out of the cultural/current event loop) and that there is an inverse correlation between how busy people are at work and online media traffic.

For some reason one of most significant swings from May to July was the average time spent per person reading the NY Post, which increased over 50%, from a paltry 6 minutes per month to over 9 minutes. Alright, now we’re confused, what are you up to Rupert?

EXCLUSIVE: Top 30 Web Sites for July Traffic [Editor & Publisher]
UPDATE: Here’s Ranking of 30 Most Popular Newspaper Sites for May [Editor & Publisher]

Wall Street Journal reporters are in mourning today after the Bancroft family sold their souls to the News Corp Murdochracy for $5bn. “It’s sad. We held a wake. We stood around a pile of Journals and drank whiskey,” one writer said.

The Journal’s Managing editor, Marcus Brauchli (whose job, it should be noted, was secured during those interminable negotiations for “editorial independence”) tried to cheer up the troops this morning, sending around an internal memo with such heartrending reassurances as, “Our journalism defines the Journal,” and “It is too early to know how or even whether News Corp. ownership might alter priorities or structures at Dow Jones.”

For the time being, he’s probably right.

The Nation reported yesterday that MoveOn.org was going to be handing out “Murdoch’d” versions of the Wall Street Journal today near the paper’s headquarters at 1 WFC (200 Liberty Street).

According to our readers, the MoveOn people are nowhere to be found, or at least not during the morning session. One reader comments, “I guess fighting the man is tough when the man gets out of bed before 10am.”

The reported headlines of the parody paper:

- “All-Out Civil War In Iraq: Could It Be a Good Thing?”
- “Is The Liberal Media Helping To Fuel Terror?”
- “The #1 President on Mideast Matters: George W. Bush?”
- “Study: Some Trees Contribute To Global Warming”
- “Have Democrats Forgotten The Lessons of 9/11?”

Wall Street Journal Gone Wild [The Nation via Yahoo News]

It’s finally pretty much almost over. Rupert Murdoch has secured enough Bancroft family shareholder votes to move forward with his $60-a-share, $5bn bid, one future News Corp holding reports.

One day after a Murdoch spokesperson said the deal was “highly unlikely,” the Denver branch of the Bancroft family, previously holding out for a higher offer, capitulated, giving News Corp at least 32% of the family vote. Nonetheless, one Bancroft family spokesperson said today, “Any suggestion that the process has been completed and/or that a particular level of support has been established is at this point premature.”

Both companies have board meetings this evening to formulate the take-over procedure. Dow Jones is trading up 7.04% to $57.50 today.

News Corp. Appears to Have Enough Votes to Clinch Deal [Wall Street Journal]
Murdoch Seen to Win Control of Dow Jones [NY Times]

This is a list of people who we respectfully submit are liars: CNBC’s David Faber, Thestreet.com’s Nat Worden, and Reuters. We believe these entities to be capital ‘L’ small ‘i’ small ‘a’ small ‘r’s because among them they share the distinction of having reported or re-reported this morning that there will be an official announcement of News Corp.’s Dow Jones victory tonight. Nothing personal, it’s just that we no longer believe the words coming out of the mouths of people who say anything—outright, implying, leading, lip synching—that even hints that this whole thing will be conclusively finished before hell freezes over. We WANT to believe them, we just can’t. Know anyone you’d like to add to our list? Send his/her name to tips at dealbreaker dot com.

In other news, MySpace co-founder Brad Greenspan sent an open letter to Dow Jones shareholders detailing a new proposal (he’s done this before, several times) in which he would invest $600 million in cash and stock in three joint ventures with DJ. Greenspan says he’s received “interest” from five “credible” investor groups, though he would not disclose their names, and their profiles are set to private. Brad informed shareholders that he and his investors “can meet this week” in order to “firm investment commitments,” but starting next week things are going to be really tight for him, so if Dow Jones could really get back to him A-sap to nail something down that would be solid, just name the time and place, but seriously, get back to him soon, otherwise, who knows, he could be busy.

Dow Jones to Agree To Takeover by News Corp. [CNBC]
Dow Jones Deal Gets Closer [WSJ]
Dow Jones Soars As Deal Appears Near [thestreet.com]
News Corp., Dow Jones deal expected Tues [Reuters]
MySpace Co-Founder Makes Another Dow Jones Proposal [Bloomberg]

Rupert Murdoch’s bid for Dow Jones, once a sure thing, then “too close to call,” is now “highly unlikely” unless the Bancroft family increases its support of the deal by 5 p.m. today, the Wall Street Journal reports.

At the moment, 28% of Dow Jones’ voting power supports the deal, although it is unclear what percentage of Bancrofts voted affirmatively; 30% of the family needs to support Murdoch for his $5bn bid to go through. If this is not met, “News Corp likely wouldn’t take the deal to a full Dow Jones shareholder vote.”

After all the mud-slinging and Rupe’s cryptic commentary, this summer’s saga could come to a close tonight, in which case I will have no idea what to write about.

News Corp. Says It’s ‘Highly Unlikely’ To Buy Dow Jones at Current Count [Wall Street Journal]

Two days after the contentious Bancroft family powwow in Boston, the Denver branch of the family announced it will vote against News Corp’s $5bn bid for Dow Jones, insisting that Rupert Murdoch raise his offer by $120-240mn. The Denver trust controls 9.1% of the Bancroft’s voting power, but has been watched closely by News Corp and Dow Jones management. “The outcome has been seen as too close to call, although the Denver trust’s decision increases doubts about the deal’s prospects,” The Wall Street Journal reports.

The Colorado Bancrofts want a 10-20% premium on compensation for super-voting B class shareholders (The Bancrofts) although News Corp spokespeople insist that the Murdoch will not raise the bid and that a two tiered compensation is not tenable.

Key Bancroft Family Trust to Vote Against News Corp. Bid for Dow Jones [Wall Street Journal]

Geoffrey Raymond is at it again! Now he’s gone off and painted good ‘ol Rupert Murdoch in his classic style, but this time he’s asking for a little help from the viewer. Raymond is displaying his masterpiece outside of One World Financial Center so that Wall Street Journal employees and tourists alike can add their feelings about Rupes directly to the piece. WSJ employees in red marker, everyone else in black, with Raymond acting as a moderator. Barring rain, Raymond will be there until the end of the week and then the painting is going to the highest bidder. By highest bidder we mean any bidder, as the eBay auction starting at $3,500 has no bids to date with just three days left.

To one man walking by who refused to stop but still seemed interested, Raymond said defensively, “It’s not a picture of Rupert Murdoch, it’s a picture of a moment in the history of the Wall Street Journal.” Apparently this painting took only about two weeks to complete with Raymond rushing to finish before any official announcement about the fate of Dow Jones is announced. His painting of the $Honey is still a work in progress, he told DealBreaker — Raymond hasn’t yet figured out the finishing touch.

After the jump we bring you some pictures of the painting’s set up on Liberty Street.

The Annotated Murdoch [eBay]

A Bancroft wrangle over NewsCorp’s bid for Dow Jones ended in stalemate yesterday after emotional harangues from opposing factions, the Wall Street Journal reports. The meeting, in the Boston Hilton was so grueling that, “after four hours of discussion, family members were so hungry that they made do with a tray of stale danishes.”

Interviews with more than a dozen family members, outside advisers, lawyers and others involved in the process suggest that the outcome remains too close to call. What has seemed to many analysts like a logical move — accepting a $60-a-share bid for a company whose shares previously had been trading in the mid-30s — is still in question amid the deep emotions the bid has stirred. Participants said more doubts about a News Corp. deal were apparent at the end of the six-hour session than at the beginning.

On several occasions Bancrofts “held back tears” as they extolled the merits of an independent editorial board. One prominent Rupe resister, Jane Cox MacElree, seemed even to make the distressing “Daniel-Pearle-would-have-wanted-it-this-way” argument. Another opposing force claimed that the company was worth more than Murdoch’s offer of $60-a-share and that the family shouldn’t accept anything below $66.

Although only 30% of the Bancrofts’ voting power must endorse Murdoch’s proposal for it to go through, investors are becoming increasingly unsure that the deal is a sure thing, Dow stock is currently trading at $54.01, down from as high as $61.20 in June.

It looks like the interminable saga will continue for now, maybe even into August.

Relative Uncertainty [Wall Street Journal]

Off to a slow start here this morning because of the rain in New York City. We had to wait for our interwebs to dry out. (Just like Alphaville, the deal blog at Financial Times, which has reportedly had trouble due to the flooding in England. Unless that’s just Brit-speak for, uhm, one too many pints on Sunday night.)

But it’s back to business now. And by “business” we mean, of course, the saga of Rupert Murdoch, the Bancroft family and the Wall Street Journal.

One of the things we’re sure has been absolutely frustrating to anyone who has been following the endless tape of this story has been the complete lack of information about which members of the Bancroft family and its representatives control exactly which shares and which percentage of the votes. It was only at the middle of last week that we learned that Michael Elefante, the partner at the Boston law firm Hemenway & Barnes who is a trustee for two of the largest trusts holding shares for the family, can deliver a little less than half of the family’s 64% voting stake. Let’s call that 30% of the total voting power of the company.

Today the New York Times reports that the leader of the opposition to Murdoch within the family, Christopher Bancroft, controls around 14.5 percent of the total Dow Jones shareholder vote as of January. And his cousin, Jane Cox MacElree, is running around with 14.8 percent. (Apparently no-one else has more than 4.3%.) But you have to read a bit between the lines of the Times—too often the stuff we really want to know apparently isn’t “fit to print”—to understand why they spend so much time talking about Chris and so little talking about Jane. It’s because Jane isn’t really involved with the Dow Jones stuff, and leaves the decision making to Chris. So you can count her shares as shares controlled by Chris. That gives him around a little more than 30% of the voting power of the company, or about what Elephante controls. To that you can add the “Never Murdoch” shares controlled by the Ottaway family to come up with a 36% opposed number.

In short, going into today’s big Boston Bancroft powwow, Murdoch is a bit behind. Probably at least 36% of the voting power of Dow Jones opposes him. He’s got 30% on his side. But Murdoch has a secret weapon: the 30% or so of the voting power vesting in shares that were once held by the general public and are now held by stock arbitrageurs, the Bancrofts, the Ottaways and a few people who aren’t paying any attention. Most of those shares will vote his way. To play it safe, let’s put that pro-Murdoch number at around 25%.

Which gives Murdoch right around 55% of the voting power of the company. Since he only needs 51%, that means he wins. But it’s close. And since we’ve been guestimating at a few of the crucial numbers, it’s possible that it’s even closer than this. If the numbers are shifted a couple points in the only direction—say, Elefante only has around 28% of the vote in his pocket and only 22% votes held by common shareholders go for Murdoch, he’s down to a losing 50%.

Which leaves us at the exciting possibility that we may be entering the rare situation where a very few amount of votes—perhaps those held by a small shareholder who doesn’t even remember he has the shares in his account (or his attic)—could swing the voting. In short, the Bancrofts may be meeting in Boston in 2008. But the voting may well be in Florida, 2000 territory.

A Family Meets Today to Hear the Complexities of a Bid for Dow Jones [New York Times]
Bancrofts To Consider Murdoch Bid, ‘Close Vote’ Predicted [New York Sun]
Know Your Bancrofts [New York Magazine]

When Wall Street Journal’s Sarah Ellison broke the story late Monday that Dow Jones chief executive Richard Zannino and News Corp’s Rupert Murdoch reached a tentative agreement over lunch to bring the News Corp’s bid for Dow Jones before the board of directors, many were surprised that the offer price hadn’t budged from original $5 billion, or $60 a share.

They shouldn’t have been. Throughout the months since Murdoch first approached Dow Jones representatives with his offer, advisers to Murdoch have coached him not to increase his bid. Early on some thought he might increase the price in an attempt to overcome resistance from some members of the Bancroft family. But Murdoch’s investment bankers advised him that it was foolish to bid against himself, raising his offer at a time when the Bancroft’s had not yet indicated that they were willing to sell at any price.

Some of Murdoch’s advisers believed that a higher, second bid might have actually invited a competing bid for the company if it was seen as Murdoch’s best offer. By sticking to the original bid, Murdoch may have discouraged other potential bidders who were not sure they could outbid the deep pockets of a cash rich News Corp.
Even after negotiations with the Bancroft family began, some observers thought Murdoch might increase his bid. “While the initial $60-a-share offer represents a hefty premium over where Do Jones’s stock was trading before Mr. Murdoch’s offer became public, Dow Jones hopes the Bancroft family’s ambivalence about the Murdoch deal could help the company extract a few more dollars per share,” Ellison writes in her story today.

The thinking in the News Corp camp, however, runs completely in the other direction. The Bancroft family had already extracted value from News Corp in the form of promises of editorial independence, and had dragged out the negotiating process—taking up time and energy from Murdoch and his advisers. These discussions and concessions have been seen as part of the price News Corp was paying to buy Dow Jones. In effect, they were counted as increasing the cost of the deal.

What’s more, the Bancroft family’s continued ambivalence despite the negotiations and concessions has frustrated Murdoch and his advisers. The view within the Murdoch camp has been that as long as the Bancroft family continued to resist selling the Dow Jones for non-financial reasons, there was little point in increasing the financial incentives.

“The Bancrofts kept saying that this wasn’t about the money,” one person familiar with the News Corp strategy said. “Murdoch decided to take them at their word.”

While initially trading higher this morning, the stock dropped today to its lowest level since the Bancroft family first agreed to meet with Murdoch at the end of May. This may indicate traders now believe that Murdoch will not offer a higher price than his original bid.

Dow Jones, News Corp. Set Deal [Wall Street Journal]

Although a NewsCorp deal will likely may be announced this week, Ron Burkle and Brad Greenspan, two renegade investors no one takes seriously had a meeting with the Dow Jones board yesterday. The pair, who did not present an offer and have few, if any commitments from other investors, want to “buy out only those members of the Bancroft family who wanted to sell,” the New York Times Reports.

The primary Dow Jones union recruited Burkle, who owns the private equity firm Yucaipa Companies, to partner with Greenspan and block Rupert Murdoch’s bid in what seems to be another effort to protect the journal’s editorial independence. The New York Observer details the lunch between Greenspan and a union leader in which the plans were discussed.

“I think it’s clear the family does not want to sell to Rupert Murdoch. If they did, they would have taken the $5 billion a long time ago. We would much rather have the family continue its stewardship of this company. I believe that working with Burkle and a number of other people, we have alternatives, if the family wants an alternative,” union leader Steve Yount tells the Observer.

But does this make any sense? Does the addition of Burkle make Greenspan’s half-baked bid less crazy or twice as crazy? We would side with the latter, but don’t take our word for it. Take the word of the former chief executive of Dow Jones, Peter Kann, who the Journal describes as “outspoken in his support for the independence of Dow Jones”

“If the family is going to sell I see no point in pursuing industrial conglomerates, Internet entrepreneurs, supermarket magnates and real-estate developers. None know anything at all about journalism. As to Mr. Murdoch, at least he loves newspapers, presumably would invest in the WSJ and Dow Jones, and would seem to have little incentive to tarnish a trophy he has coveted for so long,” Kahn says in today’s Journal story on the item.

Also, see Gary Weiss for what happens when amateur investors buy newspapers. A serious question for Dow Jones employees who may be invited to join some sort of leveraged Employee Stock Ownership Plan rival buyout bid is whether they want to spend part of their paycheck buying the company from the bondholders for the next decade or so. Because that’s the best-case proposal from a Burkle-Greenspan partnership.

Shares of Dow Jones traded slightly lower today, bringing our technical arbitrage measurement down to 90%. But we’re exercising our own editorial independence here and refusing to move the meter. It remains unchanged at 95%.

Burkle and Greenspan Gather Journal Kiddies for ESOP Fable [New York Observer]
Dow Jones Hears Alternative Proposals [Wall Street Journal]
2 Investors Discuss Partial Purchase With Dow Jones Board [New York Times]

The co-author of the fabricated tale from Friday about News Corp. having bought Dow Jones is sticking by his story. Andrew Neil, who wrote the article with James Forsyt, and is “credible” because (in light of?) he edited Murdoch’s Sunday Times of London for 11 years, took issue with the fact that Dow Jones representatives called him out for lying. His take? “[The protestations] are rubbish…They’re all swearing at us because, I assume, they’re all out in the Hamptons.” Mr. Neil, the Times reports, was drinking at the Ritz at the time.

Earlier: Rupert Murdoch Does Not Own Dow Jones…Yet!
Interminable Dow Jones Saga Possibly Over?

Expert on Murdoch Insisted the Dow Jones Deal Was Done [NYT]

For a couple of weeks, shares of Dow Jones & Company have been trading below the $60 price Rupert Murdoch offered, which most likely reflects a slight discount for risk that the deal won’t ever go through, skepticism about the notion that Murdoch might offer even more money for the media company and the belief that the deal won’t close immediately. We’ve had the Murdoch Meter, which measures the chance of Murdoch buying the company at his offer price, fixed at 90% for some time. And shares have been trading between $58 and $57.

This morning world came from across the Atlantic that negotiations with the Bancroft family were done and a deal announcement was imminent. Shares jumped on the open and kept climbing despite reports on CNBC and DealBreaker quashing the rumor. They’re now at $59. This pushes our auto-arbitrage meter up to 95%.

Ordinarily we’d just correct the meter if it moved on fake news. But we’re hearing things that are convincing us that although the Bancroft family may not yet have formally accepted the offer, an announcement may be coming soon. The right people—lawyers, bankers—are busy this weekend, not making appearances at places we expected them to be. And they are clamming up, as they often do before a deal is announced to the market. From this, well, anti-leaking we’re reading an imminent deal.

Of course, since so much of this depends on what is decided a very few individuals who happen to be descended from people who bought the company a few generations ago, this could all change. But we’re following the arbs and fake news today and moving the meter up to 95%.