IBS

AFP

FOXES in a chicken coop would admire the effect that Rupert Murdoch, the boss of News Corporation, has had with his attempt to buy Dow Jones. His unsolicited $5 billion bid for the media company, whose assets include the Wall Street Journal and a respected news-wire service, has caused a furore. Dow Jones shareholders and assorted journalists have said they fear editorial interference. Trade unions have tried to inveigle competing bids from friendlier tycoons. Rivals have scrambled to see how they might profit. Even so, events this week have reinforced Mr Murdoch’s status both as the favourite to win and as the best bet for Dow Jones’s future.

Rival bids range from the uninspired to the unproven. Brad Greenspan, an internet entrepreneur who was once part-owner of MySpace, another News Corp acquisition, said on Wednesday June 20th that he had offered to invest in the company at $60 per share, matching Mr Murdoch. But Mr Greenspan’s offer is for just a quarter of Dow Jones and he cannot begin to match the strategic logic of News Corp’s bid.

A more plausible rival is a consortium that may well never exist. The Wall Street Journal itself reported that General Electric (GE) and Pearson, the owner of the Financial Times (which owns half of The Economist), were plotting to buy Dow Jones and combine it with their own business-media assets in a separate company. A minor stake in this new entity would be given to the Bancroft family, which holds a majority of Dow Jones’s voting shares and has been queasy about selling to News Corp.

Both GE and Pearson have been tight-lipped about the story in public. Talks would make sense, as each has good reason to oppose Mr Murdoch. A reinvigorated Wall Street Journal could threaten the Financial Times and provide content and credibility for News Corp’s planned business news channel, a rival to GE’s CNBC. Bringing the Financial Times and the Wall Street Journal together could save them both money while creating a beefy global advertising platform. Pearson said on June 19th that it was considering a sale of Les Echos, a French business paper, fanning speculation that it wants to raise cash to finance a Dow Jones bid.

But the obstacles remain daunting. Mr Murdoch’s offer was pitched high to deter other suitors. Pearson has spent the past few years carefully building up its educational-publishing business—splurging to protect the Financial Times would take some explaining to shareholders. Previous discussions on sharing costs between the Financial Times and the Wall Street Journal came to nothing. Joint ventures are hard to negotiate (GE has already had abortive discussions with Microsoft about a bid for Dow Jones) and even harder to run.

Others may yet enter the fray. Ron Burkle, a Californian supermarket tycoon who has been approached by Dow Jones employees, is rumoured to be considering a bid. Brian Tierney, owner of the Philadelphia Inquirer, has expressed an interest. But these are long shots. The Bancrofts are concerned by risks to the integrity of the Wall Street Journal (in response Mr Murdoch has offered to set up an independent editorial board like the one he has in place at the Times, a similarly storied British newspaper). But the news on June 20th that the Dow board would take the lead in bid negotiations, wresting control from the Bancrofts, may signal a quick resolution to the battle.

Despite the opposition Mr Murdoch has generated, that would be good news for Dow Jones's shareholders and workers. Of the potential buyers, Mr Murdoch is the most likely to invest heavily in the Wall Street Journal. (GE would certainly take a more ruthless view of underperformance, and some would doubt that the world’s second-largest company would take any more care than Mr Murdoch to protect editorial ethics.)

As for Mr Murdoch’s alleged downmarket tendencies, he is too shrewd to ruin the brand that makes Dow Jones attractive in the first place. In any case, he could find other ways to satisfy those vulgar inclinations. According to Peter Kreisky, a media consultant, there is room in the American market for a populist national paper. Bringing together News Corp’s undoubted tabloid editorial skills and the Wall Street Journal’s impressive production and distribution arms might just make it possible to fill that gap.