By Robert MacMillan
NEW YORK, July 31 The Bancroft family's expected decision to sell Dow Jones & Co. Inc. DJ.N to News Corp. NWSa.N marks the demise of an American news dynasty that fostered editorial independence but sometimes veered into neglecting the business.
The Bancrofts are among a group of centenarian newspaper families that includes the Sulzberger clan, who run The New York Times Co. (NYT.N), and the Chandlers, who cashed out of Tribune Co. TRB.N earlier this year.
In the sepia-toned years of the late 19th and early 20th centuries, these families were stewards of what many historians characterize as the golden age of news.
The Bancrofts refrained from interfering with the news operations at their flagship Wall Street Journal, one of the world's most respected newspapers, as well as at other Dow Jones properties.
But that remoteness, in the midst of sweeping changes in the way people get their news due to the Internet, has led to criticism that the family was an absentee owners.
"We are actually now paying the price for our passivity over the past 25 years," Bancroft family member Crawford Hill wrote in a letter to his relatives last week. "Our real legacy was an inherited lack of awareness as to what it takes to nurture and pass on an effective legacy about what is really required to be responsible, engaged and active owners of a family business."
Critics say the Bancrofts' arms-length approach allowed Dow Jones executives to pursue unwise business decisions like the purchase of Moneyline Telerate financial information business, and to be ill-equipped at dealing with fundamental changes in the business.
"Up until the past few months, there has never existed a family culture of questioning management," Hill wrote in the letter posted on the Journal's Web site.
"I always wondered what the point of owning something was if you could not even seriously question those who had been hired, in essence by you, to run your business. How screwy is that?" he added.
The Bancrofts are set to sell Dow Jones to Rupert Murdoch, who by most accounts has never owned a newsroom he didn't make himself a part of, suggesting headlines and shaping the flow of the news.
Dow Jones board and family members Christopher Bancroft and Leslie Hill initially rejected News Corp.'s $5 billion offer on fears that Murdoch would sacrifice newsroom independence in the name of furthering his business interests.
But in the end, enough family members agreed to Murdoch's $60 a share offer, reportedly in part because Dow Jones was negotiating a deal to pay an estimated $30 million or more in legal and advisory fees for the Bancrofts.
"After all the high-minded concerns about editorial interest and journalistic excellence, it gets down to who pays the legal fees for the Bancrofts," said Benchmark Co. analyst Ed Atorino. "So much for principles."
Then again, the family may not have had much choice, said Philip Meyer, a journalism professor at the University of North Carolina and author of the book "The Vanishing Newspaper: Saving Journalism in the Information Age."
"You can't blame the families because the economics of the newspaper business are changing too," said Meyer, who worked for several decades at Knight Ridder, a family-owned newspaper chain that sold itself to McClatchy Co. (MNI.N) in 2006.
Until Murdoch's surprise $60-per-share offer in April, most of the Bancrofts did not participate in the day-to-day affairs of the business.
"Thirty-five members of the family can't decide where to go eat lunch, much less make billion-dollar decisions," said Davis Merritt, a former Knight Ridder publisher. "The larger the family gets and the further from the business, the more detached they become."
Alex S. Jones, director of the Joan Shorenstein Center for the Press at Harvard University, interprets the distance between the Bancrofts and Dow Jones's business operations as the family's commitment to independence in news reporting.
"I think it's fair to say that the Bancroft family members may have been disappointed at the financial results that Dow Jones has had over the last decade," he said. "At the same time, I'm sure they have taken great pride in the Journal's success."
Other problems affecting Dow Jones and other newspaper publishers have been unavoidable, including a long sunset for the print business as readers and advertisers turn to the Internet. That has come regardless of the level of the family's involvement, said Tom Rosenstiel, director of the Project for Excellence in Journalism.
"Was it the hands-off model that the family used? Or was it just the people that were in key decision-making roles? It's hard to say," he said.
((Editing by Gary Hill; Reuters Messaging: firstname.lastname@example.org; 646-223-6012; e-mail: email@example.com.)) Keywords: DOWJONES NEWSCORP/BANCROFTS
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