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NEW YORK (Reuters) - Rupert Murdoch's deal to buy Dow Jones & Co Inc. won support on Wednesday in the editorial pages of his long-coveted Wall Street Journal, which defended its new boss and tasked him with upholding more than a century of journalistic principle.
The Journal said there was no doubt who was really in charge of Dow Jones despite a hard-won agreement with its controlling Bancroft family to create independent oversight of the news.
"This isn't intended to be some heat shield protecting Journal editors from their new owner," the Journal's editorial board wrote, referring to a five-member committee charged with protecting editorial independence. "We know enough about capitalism to know that there is no separating ownership and control."
The agreement for a $5.6 billion buyout, which includes debt, followed three months of wrangling between Murdoch's News Corp and the Bancroft family, who questioned the 76-year-old media mogul's intentions for one of the most prized U.S. business publications.
The Journal editorial board pointed to The New York Times and the Financial Times, two rivals likely to feel the pressure from a Murdoch-owned Dow Jones, as "especially aggressive" in doubting his ability to separate news coverage from his own interests.
"Readers can judge if the tears these papers and their writers claim to shed for the Journal's future are real, or of the crocodile variety," the editorial said.
Many Journal reporters and other Dow Jones employees had also opposed Murdoch's bid over fears that he would tarnish the Journal's image.
In an effort to ease such concerns, Journal publisher Gordon Crovitz also issued a letter published alongside the editorial piece.
"As owner, Mr. Murdoch will be fully accountable for the company," he wrote. "This is a strong protection for readers because it's the reputation of our journalism that drives so much of the value of Dow Jones."
News Corp announced the deal early on Wednesday, adding a powerful news outlet to its sprawling media empire that spans the Fox television stations, MySpace online social network and Times of London newspaper.
Murdoch has said that Dow Jones's news operations, which also include Dow Jones Newswires, the Barron's business weekly and MarketWatch financial site, would also fuel a new Fox business channel to be launched later this year. Dow Jones competes with Reuters Group Plc on financial news.
News Corp did not outline the future direction of Dow Jones and its top executives. In media interviews, Murdoch has raised such ideas as offering the Wall Street Journal for free online, building up its U.S. political coverage and aggressively recruiting the world's top business journalists.
Dow Jones shares rose 82 cents, or 1.4 percent, to $58.20 on the New York Stock Exchange while News Corp gained 12 cents, or 0.6 percent, at $21.00.
Bancroft family members holding about 37 percent of Dow Jones's voting power agreed on Tuesday to support the deal after failing to rouse competing bids. That represents more than half of the 64 percent voting shares held by the family.
Dow Jones shareholders still must approve the buyout, but their support is expected given the 65 percent premium Murdoch offered in his $60-per-share deal.
A Bancroft family member or another person agreed to by both sides will be appointed to the News Corp. board.
The deal is expected to close in the fourth quarter and carries a $165 million termination fee.
A commissioner on the Federal Communications Commission said on Wednesday the regulating body should take a careful look at the deal and its impact on U.S. media diversity.
The Bancrofts are among a group of U.S. newspaper families that includes the Sulzberger clan, who run The New York Times Co., and the Chandlers, who cashed out of Tribune Co. earlier this year.
Unlike their peers, the Bancrofts refrained from interfering with the Journal's news operations. But that remoteness -- as readers flock to the Internet for news -- led to criticism that the family was neglecting the company.
In selling to Murdoch, the Bancrofts pass Dow Jones to another media dynasty. Murdoch, who built News Corp from two Australian papers, also controls his global media empire and sees its future someday in the hands of his children.
Additional reporting by Megan Davies