How split are the Bancrofts, on the subject of the News Corp bid for Dow Jones?
Floyd Norris, behind the
Times subscription firewall, has been working his way through the Dow Jones
on file at the SEC. Here’s what we knew already: the Bancrofts control 64.2%
of the votes, and Bancrofts representing 52% of the votes are opposed to the
deal. Which means that about 81% of Bancrofts are opposed, which doesn’t sound
like there’s much of a split.
But look a little deeper, says Norris:
Many of the family shares are tied up in family trusts. I assume that a majority
of the trustees are on board for rejection, so all of those shares are against
this deal, at least for now.
If that is true, then about 28 percent of the votes are in shares held directly
by family members — or in foundations that they control. And if 12 percent
of them have not signed on, that would leave 16 percent that have agreed.
That leaves more than 40 percent of the family, as measured by votes, not
on board.
And that is a lot of dissension.
Maybe this is the genius behind the timing of the Murdoch bid. Yes, the Bancrofts
control more than 64% of Dow Jones voting rights. But the Bancroft family trusts
only control 36% of those rights; the rest of the Bancroft votes are in the
hands of individual family members. And everybody who’s ever been a member of
a family knows that individual family members don’t always act in concert with
each other.
As the Bancroft family gets younger and more dipersed, its solidarity will
necessarily fracture. Now might well be the point at which family members who
have no managerial role in the company decide that a lot of money now is preferable
to very little money in the future, as an independent Dow Jones continues its
inevitable and inexorable decline. Yes, the Wall Street Journal is something
to be inordinately proud of: it’s on everybody’s list of the top five newspapers
in the world. So maybe the selfless thing to do is to sell it to someone who
has a better chance of giving it a rosy future.