Newspaper industry in crisis? Big-bucks takeovers suggest otherwise

[Omaha Steve]

http://reclaimthemedia.org/corporate_power_consolidation/newspaper_industry_in_crisis_b=527

Submitted by jonathan on 4 June, 2007 - 9:52am. Corporate Power/Consolidation | Media Literacy/Bias | Newswire
Summary:

Dow Jones and Reuters in play; Tribune eyed warily
Full Story:



Is the newspaper industry terminal? Apparently not, judging by the recent actions of Rupert Murdoch, Sam Zell and the Thomson family.

Murdoch, whose News Corp. already owns the New York Post, the Fox TV network, MySpace and a host of other media properties in the U.S. and abroad, has made a surprise bid to buy Dow Jones, publisher of The Wall Street Journal and Barron’s, among other ventures. Precisely when Murdoch first made his offer is in some dispute, but just days after the May 1 disclosure of his interest, Toronto-based Thomson Corp. made an equally unexpected bid for Reuters Group PLC. The latter combination, approved by Reuters trustees May 15, creates the world’s largest financial news and data company.

Meanwhile, real estate developer Sam Zell’s apparently successful takeover bid for Tribune Co. is coming under increasing fire for shifting most risks to employees. Teamsters attending Tribune’s annual meeting May 9 questioned the company’s board of directors about various aspects of the deal, noting that Zell’s risk will be minimized by tax breaks and “phantom” stock ownership, while employees will be dragged along for the ride via an employee stock ownership plan that gives them no say in corporate governance.

“This plan is a perversion of what ESOPs were designed to do—namely, to empower workers as owners,” charged Teamsters President Jim Hoffa. “This structure makes the employees shareholders in name only.” The Teamsters represent approximately 2,000 Tribune workers.

Also weighing in against the Tribune deal was consumer rights activist Ralph Nader, who accused Zell of “strip mining” the industry via “an exotically complex transaction.” “How else could Sam Zell put only $315 million of his own money into the pot—most of it a loan, no less—take control of this media conglomerate as chairman of the board and retain the right later to buy 40% of the stock for only $500 million,” he asked.

While the Tribune takeover may have been done on the cheap, there was nothing cheap at all about Murdoch’s bid of $60 a share for Dow Jones—at a time when the stock was trading in the mid-30s. The proferred premium was so rich that many observers viewed it as a preemptive strike to block other would-be bidders, yet it wasn’t enough to sway the Bancroft family, which holds voting control and which rejected the offer—for now. At press time, some family members reportedly were pushing for a meeting with Murdoch, arguing that it wouldn’t hurt to hear him out, and Murdoch was pressing his case with a letter to the Bancrofts assuring them of his good intentions—and offering them a seat on the board on which they already have several representatives.

FULL article at link.

[blm]

1. Control the media and you control what kind of government a nation ends up with.

And THAT is why the media purchases keep piling up.

[Demeter]

2. These Are Bottom Feeders, Carrion Scavengers

Trying to suck the marrow out of the broken bones of the once living Free press.