A Bancroft speaks out


In the first public comments by a member of the controlling Bancroft family, Christopher Bancroft has told the Wall Street Journal he doesn't want to "pull the rug out" from under WSJ employees and doesn't see a takeover of Dow Jones & Co. by News Corporation as a good move. The WSJ article, however, notes a generational split in the family, with some younger members questioning how the family trusts are being run.

While the Bancroft family did hold a powwow on the five billion bucks offer from Rupert Murdoch's News Corporation on Wednesday, the WSJ reported that Christopher Bancroft, who is a Dow Jones director, and other key members of the family skipped the gathering. With their family control of Dow Jones going back exactly 100 years, the Bancrofts are now a far-flung group and the family tree has branches with different views on how the company should be run – or whether it ought to be put up for sale. For one thing, the WSJ says some younger members are not pleased with the way their inheritance is being managed.

Virtually all of the profits at Dow Jones are being paid out in dividends, with almost nothing being invested back into the company. The dividends going to the Bancroft trusts are all paid out to the older generation and some of the younger heirs are said to question whether that generous dividend policy is endangering the future value of the family fortune. While some Bancrofts, particularly some of the younger ones, are open to the idea of a sale, the company's flagship newspaper said there is no consensus in the family on what course to pursue.

RBR observation: Despite his insistence that he would have preferred to have kept his 60 bucks per share offer private, the public disclosure has accomplished what Rupert Murdoch needs most – to get the Bancrofts thinking seriously about the future course of Dow Jones and stirring debate within the family. Those heirs who weren't even told about the Murdoch bid until it became public are now likely to push for a family reassessment of whether cashing out might be a good idea. Some are no doubt concerned, and well they should be, about the announced merger of Reuters Group and Thomson Corporation, creating a second financial information company of approximately the same size as Bloomberg, leaving Dow Jones in a more distant third place.