War at the Wall Street Journal (39 page)

Barney Calame and Stuart Karle taught me the rigorous and unwavering ethical standards that defined the
Journal.

Nik Deogun hired me to come to New York and looked out for me on many occasions. He worked with me on my last assignment, to cover Rupert Murdoch's bid to buy the paper. That story gave me the immense privilege of working directly with Paul Steiger, who oversaw the paper's coverage of the deal. I am indebted to the team of editors and reporters who worked with me on that story: Mike Siconolfi, Rich Turner, Martin Peers, Susan Pulliam, Matthew Karnitschnig, Dennis Berman, and Susan Warren. Matt Murray and Margaret deStreel were gracious under tremendous deadline pressure.

I am grateful to Marcus Brauchli for granting me leave to write this book and promising he would take me back no matter what I wrote, as long as it was true.

Thanks to my former colleagues, including Geeta Anand, James Bandler, Lisa Bannon, Rebecca Blumenstein, Ellen Byron, Robert Christie, Michael Connolly, Gordon Crovitz, Kevin Delaney, Jesse Drucker, Jennifer Forsyth, Robert Frank, Alix Freedman, Alessandra Galloni, Bill Grueskin, Dan Hertzberg, Larry Ingrassia, Paul Ingrassia, Dave Kansas, Dan Kelly, Kate Kelly, Almar Latour, Peter Lattman, Merissa Marr, Mike Miller, Alan Murray, Emily Nelson, Bruce Orwall, David Sanford, Suzanne Sataline, Sam Schechner, Steve Stecklow, Brian Steinberg, Joseph Stern, Kim Strassel, Suzanne Vranica, Mike Williams, and Rich Zannino.

My friend Julia Angwin, who juggled a newborn and a book project just a year before I did, was always ready with much-needed encouragement and advice.

Special thanks to the Bancroft family and their advisers, too numerous to name here, who generously shared their time and the stories of their family.

I am grateful to Rupert Murdoch and his family for agreeing to talk to me for this book. Thanks to Gary Ginsberg and Teri Everett for their help with my research; to Robert Thomson for his wit; and to Lon Jacobs, Jimmy Lee, John Nallen, Arthur Siskind, Andrew Steginsky, and many other current and former News Corp. employees and advisers who were helpful to me.

Thanks to Neena Lall for her early transcriptions, Kate Ryder for her research assistance, and especially Nadia Mustafa for her meticulous fact checking. Meredith Angwin provided sage comments on an earlier version of this manuscript. Daniel Okrent, Norman Pearlstine, Ken Auletta, and James Stewart gave me early advice that was extremely useful. Christopher Dickey and Michael Elliott helped me get to the
Journal,
and for that I am grateful.

I couldn't have started, much less finished, this book without the wise counsel and encouraging words of my agent, David Halpern. Kathy Robbins and everyone at the Robbins Office, including Ian King and Rachelle Bergstein, were enormously supportive at every step. George Hodgman at Houghton Mifflin Harcourt was this book's champion. No author could ask for a more passionate or hilarious editor. Special thanks to Andrea Schulz for her encouragement and advice. Barbara Wood was a meticulous copyeditor. Thanks, too, to Larry Cooper and Loren Isenberg at Houghton Mifflin Harcourt for their attention to the manuscript.

My friends have been a source of sanity: Jenny Carchman, Claudia Campo, Nell Casey, Caroline Cooper, Valerie Lincy, Christina Lowery, Betsy McPherson, Kendra Percy, and Nita Rao. Special thanks to Lexi Reese, Saira Rao, and Lisa Turvey, who were on speed dial.

Thanks to my in-laws, Erica and Peter Eisinger, for enduring long discussions of book titles. Sarah Eisinger accompanied me on many soul-searching walks around the park.

My warmest gratitude goes to my parents, James and Susan Ellison, whose unconditional love instilled in me the confidence and work ethic required for a book like this. My mother spent six weeks taking care of my newborn daughter so I could finish the manuscript. My amazing brother, J. P. Ellison, his wife, Lauren Case, and their children, Meredith and Henry, have provided constant love and savvy Web design. The Ellison and Miller aunts, uncles, and cousins were wonderful cheerleaders, especially my aunt Nancy Miller and cousins Carrie and Gretchen.

To my daughter, Iva: Every author should have such a joyous interruption of the writing process. And, especially, to my husband, Jesse Eisinger, without whom I would never eat a proper meal, much less write a book. Any mention here couldn't possibly reflect my deepest love and thanks.

This book is based primarily on firsthand reporting consisting of hundreds of interviews with Bancroft family members and advisers; Murdoch family members and advisers; current and former News Corp. executives; and current and former Dow Jones executives. My coverage of News Corp.'s takeover of Dow Jones began in the spring of 2007 as an assignment from the editors of the
Wall Street Journal,
where I worked for a decade and where I was the media reporter at the time of Rupert Murdoch's formal bid for Dow Jones. This book would not have been possible without the foundation of that reporting and the extraordinary effort of my fellow reporters and talented editors at the
Journal.
However, I re-reported this book in its entirety, and I had no financial ties to Dow Jones or News Corp. as I wrote it.

While I received cooperation from all of the significant players in the narrative, this is not an authorized account. It has not been vetted or cleared by News Corporation or Dow Jones.

Because the
Journal's
initial reporting on News Corp.'s offer for Dow Jones formed the basis of my knowledge of the events, I have listed the bulk of the paper's articles on the topic here, by date:

 

"News Corp. Duo Set to Lead Dow Jones as Zannino Resigns," December 7, 2007

"Bancrofts Bicker, Miss a Deadline, Lose Board Choice," November 7, 2007

"Dow Jones Didn't Get a Viable Rival Offer," September 8, 2007

"Member of Independent Dow Jones Panel Has Ties to News Corp.," August 3, 2007

"Murdoch Wins His Bid for Dow Jones—Bancroft Family Agrees to $5 Billion Offer After Deal on Fees—A New Owner for Journal," August 1, 2007

"Dow Jones Deal Gets Closer as Talks Turn to Fees—Fund Would Cover Some Family Costs to Gain Key Votes," July 31, 2007

"Bancrofts' Jockeying Over Murdoch Deal Goes Down to the Wire," July 30, 2007

"Bancroft Wrangling Intensifies—As Bid Deadline Looms for Dow Jones, Splits in the Family Remain," July 28, 2007

"Relative Uncertainty: As Sale Decision Nears, Family Split Persists—Murdoch Deal Pits Heirs Against Parents; Call for a 'Leap of Faith,'" July 25, 2007

"Dow Jones Board Member Quits in Protest—German Publishing Heir Cites News Corp. Deal; Net Falls 27% on Charges," July 20, 2007

"For Bancrofts, Decision Time Is Near on Sale of Dow Jones—News Corp. Seeks to Know 'Promptly' If Deal Is Supported," July 19, 2007

"SEC Plans Suit Against Dow Jones Director," July 19, 2007

"Dow Jones Board Approves Sale—Vote Could Pressure Family; Christopher Bancroft Leaves Meeting Early," July 18, 2007

"Dow Jones, News Corp. Set Deal—Tentative $5 Billion Pact Gets Board Vote Tonight; Family to Meet Thursday," July 17, 2007

"Key Bancroft Aims for a Long Shot—Second Family Member Scrambles to Stop Sale of Dow Jones to News Corp.," July 16, 2007

"Dow Jones Makes Late Push to Find Other Buyers," July 9, 2007

"Dow Jones Pact Would Protect Three Top Editors," July 3, 2007

"Bancroft Heir Pursues Alternative to Murdoch," June 29, 2007

"News Corp. Awaits Reply from Bancrofts," June 28, 2007

"News Corp. Nears Dow Jones Pact—Agreement on Protection of Editorial Independence Would Pave Way for Sale," June 26, 2007

"Dow Jones Deal Talks Intensify," June 25, 2007

"Dow Jones Board Takes Over Talks on Firm's Future—Deal with News Corp. Becomes More Likely; 'Fish or Cut Bait' Mood," June 21, 2007

"GE and Pearson Discuss Joint Bid for Dow Jones—Talks Signal Alternative to News Corp.'s Offer Could Be Taking Shape," June 18, 2007

"Dow Jones Scenarios Highlight Divide," June 14, 2007

"Dow Jones Moves to Cover Executives in Event of a Sale," June 8, 2007

"In Murdoch's Career, a Hand on the News," June 5, 2007

"Murdoch May Make Concessions, Up to a Limit, in Dow Jones Talks," June 4, 2007

"Family Dynamics: Behind the Bancrofts' Shift at Dow Jones," June 2, 2007

"Bancrofts Open Door to a Sale of Dow Jones," June 1, 2007

"Dow Jones Board Won't Act as Bancrofts Deliberate," May 17, 2007

"Dow Jones CEO Zannino: The Man in the Middle," May 14, 2007

"Dynasty's Dilemma: For Bancrofts, Dow Jones Offer Poses Challenge—Murdoch Bid Tests Family's Cohesion; Sell 'Grandpa's Paper'?" May 12, 2007

"Clearer Timeline of Murdoch Offer Emerges," May 10, 2007

"Dow Jones Ex-Chief Praises Family's Stance," May 8, 2007

"Ex-Dow Jones Executives Oppose Murdoch's Bid," May 7, 2007

"At Dow Jones, Focus Is on the Bancroft Family," May 3, 2007

"Key to Company's Fate Is the Bancroft Family; Firm 'No' or a 'Maybe'?" May 2, 2007

"Murdoch's Surprise Bid: $5 Billion for Dow Jones," May 2, 2007

 

P
ROLOGUE

My description of the party aboard Barry Diller's yacht is based on interviews with numerous party guests.

The history of the Bancroft family is based on extensive interviews with various members of the family as well as several books, including Lloyd Wendt's
The Wall Street Journal: The Story of Dow Jones and the Nation's Business Newspaper
(Skokie, IL: Rand McNally & Co., 1982), Richard Tofel's
Restless Genius
(New York: St. Martin's Press, 2009), and Jon Meacham's
The Beginning of the Journey
(New York: Dow Jones, 2002). In addition, a number of articles were useful, including Marshall Loeb, "Words to Profit By,"
Time,
December 7, 1998; Stephen Foley, "A Tale of Wealth and Intrigue: The First Family of Wall Street,"
Independent,
June 9, 2007; and Susan Pulliam, Dennis K. Berman, Matthew Karnitschnig, and Sarah Ellison, "For Bancrofts, Dow Jones Offer Poses Challenge,"
Wall Street Journal,
May 12, 2007.

The Bancrofts' fear of becoming "just another rich family" was reiterated to me in several interviews with family members and initially appeared in Joseph Nocera, "At Dow Jones, It's AH About Family,"
New York Times,
August 20, 2005.

Background on the Sulzbergers came from their friends and acquaintances. Other useful sources on this subject include Susan E. Tifft and Alex'S. Jones,
The Trust: The Private and Powerful Family Behind the New York Times
(Boston: Back Bay Books, 2000).

The history of the Murdoch family and Keith Murdoch's role in Gallipoli are based on interviews with Murdoch family members and longtime Murdoch family associates. Other useful sources on this subject include the National Library of Australia, "Despatches from Gallipoli; Scenes from a Remote War: Sir Keith Murdoch,"
http://www.nla.gov.au/gallipolidespatches/2-2-1-murdoch.html
.

The influence of Murdoch's
Sun
in London is outlined in the National Readership Survey,
http://www.nrs.co.uk
.

 

C
HAPTER
1

The Bancroft family trust structure was laid out for me by several family members and advisers. The most detailed newspaper article done on the trust structure was Matthew Karnitschnig, "Bancroft Trusts' Lawyers Hold Key to Dow Jones,"
Wall Street Journal,
July 2, 2007.

To describe the ascension of Peter Kann and Karen House at Dow Jones, I interviewed current and former Dow Jones executives, as well as Kann and House, for whom I worked during much of my tenure at the
Journal.
In addition to those interviews, I found
Vanity Fair's
"In the Company of Sharks," by Robert Sam Anson (August 1997), useful for its description of that era as well as an artifact itself of the disdain with which most media watchers viewed Kann and House at the time. For details on Kann's history at the
Journal,
I used a collection of stories and memorabilia his former colleagues at the
Journal
assembled for him as a retirement gift.

Financial information on the company came from company filings and the reporting on Dow Jones's performance in various publications, including the
Journal,
the
New York Times,
and
Fortune
magazine.

 

C
HAPTER
2

To describe Elisabeth Goth's campaign after her mother's death, I relied on interviews with Bancroft family members. In addition, Joseph Nocera's February 3, 1997, article in
Fortune
magazine, "Disgruntled Heiress Leads Revolt at Dow Jones," was indispensable. It not only reported Elisabeth Goth's unhappiness at the time, but it made news itself, as it was the first public account of Bancroft family unrest. Nocera's follow-up piece (with reporter associate Maria Atanasov), "Attention, Dow Jones: Ms. Goth Wants Results Now!" which appeared in
Fortune
on March 2, 1998, also proved useful.

The description of Chris Bancroft's wife was based on interviews with him as well as press articles at the time, including Paul Tharp and Zachery Kouwe, "A House Divided: Bancroft Heirs Split on Murdoch's $5B Offer,"
New York Post,
May 4, 2007.

My description of Herbert Allen's Sun Valley conference was drawn from interviews with various people who have attended the conference, as well as several books that have reported on the atmosphere of the gathering, including Alice Schroeder,
The Snowball: Warren Buffett and the Business of Life
(New York: Bantam, 2008).

My account of the state of the Murdoch family at the time of the Murdochs' meeting with Jimmy Lee in Sun Valley was based on interviews with family members as well as Michael Wolff, "Fox Family Values,"
New York,
August 17, 1998.

My characterization that the Murdoch children had reached a consensus that Lachlan was Murdoch's heir apparent was based on interviews with the chil
dren as well as press accounts at the time, including Cathy Newman, "Murdoch Vows to Keep Up Cut-Price Newspaper War,"
Independent,
November 13, 1997.