Media Moves

Why the Dow Jones/News Corp. deal is actually rocky

June 29, 2007

Posted by Chris Roush

Lisa Snedeker of Media Life magazine writes Friday afternoon that despite what appears to be a deal allowing News Corp. to buy Dow Jones & Co., the parent of The Wall Street Journal, coming closer to reality, it actually is tenuous.

Wall Street JournalSnedeker wrote, “For any deal to work, it must arise from a sense of shared interest, such that when the deal’s done both parties can move forward. They have to present a united front, and for several reasons. They need protect the value of the stock, which means putting on a good face for Wall Street, but they also need to stem the flight of talent from the paper that would result from a messy deal.

“They need a deal that brings about stability.

“But this deal still has lots of problems, and not the least is a workforce, led by the Journal editorial staff, that’s dead set against it.

“Among the issues is a ongoing dispute over their contract. Union members are going to want a new contract before any sale, knowing full well that a new owner would be inclined to demand salary cuts. The union has also been seeking out other potential buyers, including supermarket magnate Ron Burkle and investor Warren Buffett, among others.”

Read more here.

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