Rupert Murdoch finally won his long-coveted prize yesterday, gaining enough support from the deeply divided Bancroft family to buy Dow Jones & Co., publisher of The Wall Street Journal and one of the world's most respected news sources, for $5 billion.
For Murdoch, the verdict represents the pinnacle of his long career building News Corp. into a $70 billion media empire that already includes more than 100 newspapers worldwide, satellite broadcast operations, the Fox television network, the online social networking site MySpace and many other parts.
Combined with the planned beginning of the Fox business news channel in October, the purchase of Dow Jones makes Murdoch the most formidable figure in business news coverage in this country, perhaps worldwide.
It also gives a larger voice in national affairs to an owner whose properties often mirror his own conservative politics.
The boards of both companies voted last night to approve the deal.
The decision signals the end of an era for Dow Jones and the controlling Bancroft family, an intensely private clan that for generations had allowed the Journal to operate independently and become one of the nation's most prominent and trusted newspapers, even as its finances deteriorated.
For four months, some three dozen members of the Bancroft family engaged in an intense, sometimes tearful debate about the Journal's future, at times pitting siblings against one another and children against their parents.
One member of the family, Leslie Hill, resigned yesterday as a director of Dow Jones as the final deal was taking shape, the Journal reported.
The final decision was in doubt well past the 5 p.m. Monday deadline set for the family. In a twist in already tortured negotiations, some family trustees demanded that News Corp. pay the fees for the family's bankers and lawyers -- which could reach $40 million -- in return for their support. After an exhausting night of conference calls, the deal was made.
For the rest of the industry, the deal, which follows the recent sale of Knight Ridder and the pending sale of the Tribune Co., again raises the question whether newspapers can exist independently of giant media conglomerates, as advertising dollars migrate to the Web and readers have access to vast new sources of online information.
Murdoch has talked of pumping money into the Journal, beefing up its coverage of national affairs and its European and Asian editions, which could pose a serious challenge to competitors such as The Financial Times and The New York Times. That could mean losing money in the short run, something Murdoch has always been willing to do to attract readers and gain influence.
Some Dow Jones employees see having such a wealthy, engaged owner as an improvement after years of uncertainty. Still, there was no official announcement at the Journal's newsrooms, where some reporters mourned the loss of independence.
"It's sad," said a veteran reporter at one of the Journal's domestic bureaus, who did not want to be named because of concerns over his career. "We held a wake. We stood around a pile of Journals and drank whiskey."
News reports of the deal triggered an outpouring of comments on the Journal's Web site, many critical of News Corp., and some regrets from other shareholders.
"It's a bad thing for Dow Jones and American journalism that the Bancroft family could not resist Rupert Murdoch's generous offer," James H. Ottaway Jr., a former Dow Jones executive and a major shareholder, said yesterday. "I hope Rupert Murdoch, and whoever follows him at News Corporation, will keep his promises to protect and invest in the unique quality and integrity of The Wall Street Journal, Barron's and all the Dow Jones electronic news services."
It will likely take three to four months for the transition in ownership to take effect.
At the family's insistence, News Corp. has agreed to retain the top editors at Dow Jones, including Marcus W. Brauchli, the managing editor of the Journal, and Paul Gigot, the Journal's editorial page editor, and has accepted limits on its ability to remove or replace people in those posts.
The Bancrofts hope the arrangement, which they negotiated before the final deal, will restrict Murdoch's ability to influence content, particularly in the Journal, but many media experts have said he had circumvented similar agreements in the past.
The Associated Press contributed to this article.
Combining two companies
DOW JONES holdings
The Wall Street Journal and Barron's magazine.
Dow Jones Newswires and Indexes.
Factiva news database.
Ottaway newspapers group.
(calendar year 2006): $1.78 billion.
NEWS CORP. holdings
Twentieth Century Fox movie and television studio.
Fox broadcast network, Fox News Channel, FX, Speed and several regional sports networks.
Sky Italia and significant stakes in British Sky Broadcasting PLC and the DirecTV Group Inc. Liberty Media Corp. has agreed to acquire the DirecTV stake in a swap for a large block of News Corp. stock.
Numerous newspapers in Australia and the United Kingdom, including The Times of London. Only U.S. newspaper is the New York Post
The Weekly Standard, 40 percent of Gemstar-TV Guide International Inc.
HarperCollins publishing house.
MySpace; Rotten Tomatoes, a movie review site; IGN, a gaming site; and Scout.com, a sports site.
(fiscal year ending June 2006): $25.3 billion.
[ Sources: the companies, SEC filings]