August 01, 2007
The Wall Street Journal and Trustee Obligation
Posted by David Zaring

Following the decision to sell the Wall Street Journal has been fun, dynastic, twisty, public, and now over.  Rupert Murdoch has the prize, and though some commenters have scowled that "the Bancrofts never stood a chance," it seems to me that the reason News Corp. was able to purchase the asset was because it was willing to pay much, much more than anyone else dreamed it was worth.  The Bancrofts, whom I had never heard of until News Corp's offer, and who apparently didn't spend a lot of time running the Journal, are laughing all the way to the bank.

But what next?  From my selfish perspective, this deal will not have been worth it if the Journal becomes only as good as the News Corp property the Times of London ... which isn't very good (go ahead, scroll around, and try to argue that you're impressed - nothing on the WSJ acquisition by this writing, btw).

My spies in the journalism community always marvelled at how small the actual news hole was at the Journal, given the number of staffers.  It meant that you could go a while without getting in print.  But it also meant that you could spend a week, or even more, on a minor beat story, no problem.  If News Corp doesn't want to run the Journal like an unprofitable trophy, you have to think that staff cuts, paired perhaps with the creation of an investigative unit, are likely.

My final observation: at least one Bancroft, Jane Cox McElvee, resigned from one of the family's share-controlling trusts rather than vote against the deal, because she thought she'd expose herself to liability, or at least lawsuits, from trust beneficiaries.  Really?  Does trust law force you to take rich buyouts?  Conceptions of fiduciary duty have changed, I guess.  Cynics might say that trust law was invented to lock in landed English families to their estates in perpetuity.  Not force their heirs to sell to any buyer bidding above market.

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