28 May 2007

When Murdoch Changes, Does The Country Change?

I doubt Big Rupe has much patience left with John Howard's flailing government. So will the Murdoch media be the first to begin banging the drums for a Liberal leadership change? Or is he happy to watch his new disciple, Kev Rudd, march on to a sweeping victory?

And if Murdoch does push Howard out the door, which Liberal will he pick? Costello, Ruddock and Downer are clearly unelectable. Maybe Turnbull has a chance, but I suspect his own business interests and his snotty personality do not appeal to Rupert's tastes. Abbott might be the only viable choice.

Meanwhile, Murdoch's WSJ bid is still up in the air. Some analysts have predicted he will eventually get what he wants, maybe at $64 a share, and some WSJ shareholders are threatening to sue the Bancroft family if they do not take up Murdoch's generous offer. But a former Dow Jones employee, Jim Ottaway, who holds over 6% of the company's shares, has put his foot down:
"We're not trying to get another $2 a share. We don't want to sell to Murdoch for $75 a share...It's the principle, not the price .... It's the person, not the price," Ottaway told Reuters.
At least one canny Israeli investor agrees:
I had absolutely no doubt that the merger would not happen. The Boston Brahmins that control a majority of Dow Jones through super voting Class A stock would sooner host a another tea party than sell to the king of yellow journalism.

Judging by a price north of $50 a share, most of Wall Street disagrees with me and thinks that a merger will happen. In this particular case, I am not sure that Wall Street is assessing correctly the likelihood of a merger.

Many on Wall Street, including me, are arrivistes motivated mostly by money. We have chosen to push paper around for a living instead of curing the sick or defending the poor. Therefore, we can not imagine a situation where someone would walk away from a chance to double their money.

I am sure that the Bancroft and Ottoway clans are fond of money as much as the rest of us. In light of Murdoch’s offer, it would not surprise me if they later sold out to someone else or accepted an infusion of cash from private equity.

But they are not going to sell out to Rupert Murdoch who they consider an entrepreneur in the field of journalism but not a journalist with blue ink in his blood. After zealously guarding their public trust for one hundred years, they are not going to shed their responsibilities without careful consideration.
Still, there could be a happy ending for Murdoch even if the bid fails:
Why did Rupert Murdoch risk the humiliation of having his bid completely ignored? Since he is soon starting a business news channel, he needs to neutralize the Dow Jones contribution to his arch rival, CNBC. He will walk away from this deal with something. Dow Jones will agree to negotiate with his new channel when their contract with CNBC is up.
Murdoch and his Fox News channel may both be increasingly unpopular, but News Ltd's decision to go carbon neutral by 2010 is paying a propaganda dividend:
In a letter contained in News Corp.'s energy initiative, chairman and CEO Rupert Murdoch emphasizes that "addressing climate change is good business practice." He added: "We will improve the bottom line by cutting energy costs and investing in renewable resources."
Screw the planet, forget about ethics, just stay focused on the business bottom line. Same goes for politics: if an overwhelming majority of voters are concerned about global warming, go with it. And if the Australian people are sick of Howard, dump him.

Let us know when Rupert sends out the internal memo, m'kay Tim?