Can the Bancrofts Trust the Murdochs?

The talks between Murdochs and Bancrofts on Monday were "constructive," we're told. More than four hours long, they centered on the question of the Wall Street Journal's editorial independence, and whether Murdoch could guarantee it:

Chief among the family's concerns is how the independent board, proposed by Mr. Murdoch, would be structured. Under one scenario that has been discussed by family members, the editorial ranks of the company would report up through a separate structure outside News Corp., said another person close to the family. The Bancrofts, who control 64% of the voting rights of Dow Jones, want to ensure that any structure would be strong enough to stand up through the next generation of News Corp.'s management, according to people close to the family.

I do think the acquisition will be good for the Journal, and I also think that the Bancroft's are going to simply have to take Murdoch's word that he won't interfere with the editorial side of the newspaper. The fact is that, post-acquisition, the Journal will be a tiny part of a huge publicly-owned international media conglomerate.

I'm sure that the Murdochs, both Rupert and James, would love nothing more than to enshrine some kind of Marty Lipton poison pill in News Corp's structure, claiming that it's the only way to get Dow Jones. (Lipton, the inventor of the poison pill, is the Bancrofts' lawyer.) Since buying back John Malone's stake in News Corp, Rupert Murdoch's control of News Corp is stronger than ever – but he knows that won't necessarily last, especially when he dies and his stake is divvied up between his six children.

But realistically, nothing that the Murdochs and the Bancrofts sign can provide a watertight guarantee that News Corp won't be able to interfere with its property should it put its mind to it. Josh Chaffin and Aline van Duyn get to the heart of the matter:

The question then is how enforceable any structure would be, especially in light of the unclear succession at News Corp, a further issue of concern given that Mr Murdoch is 76 years old.
“It’s a very difficult kind thing to actually put in writing,” said Amy Mitchell, deputy director of the Project for Excellence in Journalism. “So much of it has to do with the rapport and understanding.”

That's why the meeting lasted more than four hours: the single most important thing at this point is for the Murdochs to persuade the Bancrofts that they can be trusted with their beloved newspaper. It won't be easy, but $5 billion does have a way of soothing worries somewhat.