The next few weeks may bring one of the great triumphs of Rupert Murdoch's career. For the Journal, the future is far less certain, writes Denis Stauntonin Washington.
Rupert Murdoch this week issued a blunt ultimatum to the Bancroft family, which controls the Wall Street Journaland its parent company Dow Jones.
If the Bancrofts want the $5 billion (€3.72 billion) he is offering for Dow Jones, the Australian media magnate declared, they had better make up their minds quickly. "The final approval is in the next two, three weeks' time or not at all," he said.
The deadline reflects Mr Murdoch's confidence that, despite concerns that he might interfere with editorial independence, he is poised to add the world's most influential financial newspaper to the $70 billion portfolio of News Corporation.
If the Bancrofts agree to sell, Mr Murdoch will reap his reward for a daring strategy that has seen opponents of a deal wrong-footed at every turn.
Mr Murdoch says he wants to use the resources of Dow Jones to provide financial news for his other media interests, including television and the internet and promises to invest in boosting the Journal's circulation and improving its web presence.
Critics fear that he also hopes to use the Journal to promote his own business interests or to advance a political agenda that could help News Corp's bottom line.
Like the New York Timesand the Washington Post, Dow Jones is a public company but, also like those two papers, it is controlled by a family through class-B shares, which have 10 times the voting weight of class-A shares.
The 34 members of the Bancroft family, which has owned the Journalfor more than a century, control over 60 per cent of the voting power in the company. However, unlike the Sulzbergers at the New York Timesand the Grahams at the Washington Post, the Bancrofts have never played a direct role in running the paper, preferring to "leave it to the professionals".
A strict separation of news from comment means that the news pages and the stridently right-wing opinion pages often appear to contradict one another but the Journalis, according to a recent poll, seen as America's most credible news source.
Mr Murdoch has long coveted the paper but it was clear until recently that the Bancrofts regarded him as unsuitable, making any bid hopeless. At an outdoor café in Rome last September, however, one of Mr Murdoch's representatives told William Cox III, a family member known to be unhappy with the way the company was being run, that News Corp wanted to make a very generous offer for Dow Jones.
When it came last April, Mr Murdoch's offer was indeed generous - at $60 a share it was 67 per cent higher than the market price at the time. Concerned about Mr Murdoch's reputation and confident that other bids would follow, the family initially rejected the offer.
Almost immediately, however, some younger members of the family started to regret the hasty rebuff of Mr Murdoch and they convened a family meeting on May 23rd to reconsider it. Older family members boycotted the meeting, leaving it to the family lawyer, Michael Elefante, who had opposed a sale to Mr Murdoch, to face down their younger cousins.
This was a serious mistake because Mr Elefante, alarmed by news of a merger between Reuters and the Thomson group that could create a financial news giant, had changed his mind about a sale to Mr Murdoch.
After the meeting, the family issued a statement that still appeared to oppose a deal with Mr Murdoch but left the door open to other offers, signalling to Wall Street that the Journalwas for sale. The family did indeed receive other offers but none matched Mr Murdoch's $60 a share and the family finally agreed to meet the News Corp boss.
Talks focused on proposals to safeguard the newspaper's independence. But Mr Murdoch rejected a proposal that would have left the Bancrofts in place as watchdogs.
"The family's selling out. They can't sell it and keep it. I have all the respect in the world for them, but you can't have it both ways. I can't put down $5 billion of my shareholders' money and not be able to run the business," Mr Murdoch said.
He proposed instead an independent board such as that established in the 1980s when Mr Murdoch bought the London Timesand Sunday Times, which meets four times a year and has a veto over the hiring and firing of editors.
Critics say the Times board has never actually done anything and it certainly did not stop Mr Murdoch from sacking Harold Evans, one of the most highly respected and influential Timeseditors in the 1980s.
As the negotiations dragged on, the family appeared unable to agree and by last week the Dow Jones board of directors were feeling nervous.
Obliged by law to maximise profits for shareholders, the directors feared they could be vulnerable to litigation if they allowed a possible deal with Mr Murdoch to slip. The board, which represents non-family shareholders as well as the Bancrofts, took over the conduct of the negotiations and early this week the two sides reached agreement on editorial independence, although they have not released details of the safeguards.
A sale now appears almost certain, not least because a rejection of Mr Murdoch's offer would send Dow Jones shares into sharp decline, dramatically reducing the generous dividends paid to the Bancroft family.
For Mr Murdoch, the next few weeks promise to bring one of the great triumphs of his long business career. For the Journal,the future is far less certain.
