Bancrofts Bicker, Miss a Deadline, Lose Board Choice
By: Wall Street Journal
By MATTHEW KARNITSCHNIG and SARAH ELLISON
November 7, 2007
The Bancroft family is sending one of its own to serve on News Corp.’s board, but only after internal discussions almost as rancorous as family members endured while deciding whether to sell Dow Jones & Co.
So unruly were the talks that the family missed an initial 30-day deadline under which it was permitted to nominate its own candidate for News Corp.’s approval, thereby contractually ceding the choice to Dow Jones’s prospective owner, News Corp. Chairman Rupert Murdoch.
The Bancrofts then continued to argue over their choice. While Mr. Murdoch didn’t impose a choice on the family, he eventually did limit whom he would consider, vetoing one candidate and deflecting another by asking that the Bancrofts choose a woman.
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The end result has brought no more harmony to the family. Instead of the seasoned newspaper veteran some family members and many journalists had hoped for, the family’s representative will be Natalie Bancroft, a 27-year-old opera singer living in Europe who, by her own admission, is a relative neophyte to the worlds of both journalism and commerce.
“I don’t think we’ve distinguished ourselves in how we’ve handled this,” said the family’s lawyer, Michael Elefante in a recent interview.
For many in the Bancroft family, sending a representative to News Corp.’s board was a way of easing the pain in deciding to sell Dow Jones and The Wall Street Journal, a custodianship that had been the wellspring of their wealth and pride for generations. Some within the family were embarrassed that they had appeared indecisive and fractious during the acquisition process, and wanted to send a message by making a choice that indicated their respect for journalistic ideals.
Instead, their deliberations misfired. “This entire, sad and pathetic, final episode is a fiasco,” family member Crawford Hill said in a recent email to his relatives. “No wonder we lost Dow Jones!!”
Under Dow Jones’s merger agreement with News Corp., Mr. Elefante and Bancroft family member Elizabeth Steele were given 30 days from the date of the Aug. 1 merger agreement to settle on a representative to join News Corp.’s board of directors, whose members include JosÃ© MarÃa Aznar, the former president of Spain, and legendary investor Thomas J. Perkins.
The early preferred candidate among some family members was former Journal Managing Editor Paul E. Steiger. Mr. Murdoch signaled he was amenable. But Mr. Steiger on Aug. 5 declined to be considered because he is launching a nonprofit investigative-journalism enterprise and felt he shouldn’t sit on any individual company boards, he said in an interview.
More than three weeks later, the deadline passed. It was a time when all the parties involved in the merger negotiations were exhausted after three months of drama. Many went on vacation. On Aug. 7, family member Thomas Hill sent an email to Mr. Elefante urging that they deal with the board decision and nominating Mr. Steiger, who had turned down the job two days before.
Many in the family weren’t aware of the deadline. In a note to the family on Sept. 20, Christopher Bancroft, who is on the Dow Jones board, said Mr. Elefante and Ms. Steele told him that “they were not aware of these timing details.” A person familiar with the situation said that Mr. Elefante was aware of the deadline, but didn’t learn of Mr. Steiger’s decision until late August. This person also said Mr. Murdoch was pursuing Ms. Steele for the post in August, accounting for more delays.
Unaware the deadline had passed, Crawford Hill put forth John Carroll, the former editor of The Los Angeles Times who left his job in protest over disagreements with the paper’s owner, Tribune Co. The family approached him informally. Said Mr. Carroll: “I said it was fine to take it to the next step but I didn’t want to be occupying a meaningless chair on the board.”
News Corp. rejected Mr. Carroll, indicating to Mr. Elefante that it wanted a candidate from the family. Mr. Elefante passed this on, setting a deadline of Sept. 24. Within hours, Ms. Bancroft threw her hat in the ring, as did other family members. In a short email to Mr. Elefante and Ms. Steele, Ms. Bancroft wrote that while it might seem “far fetched,” she believed the board seat was something she had “the capacity to handle.” Her father, Hugh Bancroft III, followed up with a note endorsing his daughter’s bid. “Although she does not ‘puff up her chest’ when talking about herself (which is part of Natalie’s character) she is direct and to the point,” he wrote.
On Sept. 25, Mr. Elefante revealed the family’s choice: Mike Hill, an environmental scientist in Boston and brother to both Crawford and Thomas. Mr. Hill had pushed the family to meet Mr. Murdoch and was known as an aggressive critic of the company’s former management. But News Corp. wasn’t comfortable with his activism, say people familiar with the situation. Mr. Murdoch’s camp also signaled that it would prefer a woman. There are no women on the News Corp. board.
Mr. Murdoch had hoped Ms. Steele, a supporter of the takeover, would accept the seat. But she declined, telling people she wanted to “move on.” She wouldn’t comment.
Another potential candidate was Elisabeth Goth Chelberg, a champion equestrian who had angered the family a decade ago by criticizing Dow Jones management and was a proponent of the News Corp. deal. But after deliberating for weeks, Mr. Murdoch settled on Ms. Bancroft. (An associate had interviewed her in London, and Mr. Murdoch later spoke to her directly.) Mike Hill said in an interview, “Now I know what Al Gore feels like.”
Mr. Elefante and Ms. Steele unenthusiastically communicated the decision to the family. “While News Corp. is aware that other members of the family received more support from within the family, News Corp. has interviewed Natalie and elected to nominate her,” they wrote.
In Ms. Bancroft, Mr. Murdoch has selected a family member who had deep reservations about selling the family business to him. In a letter to her family on July 27, Ms. Bancroft wrote that she opposed the sale because she believed Mr. Murdoch was “not the right person to own this paper, but on the other hand, as protective as we are, and with much of the false pride many of us have, do we deserve to own this paper any longer?”
Ms. Bancroft has spent most of her life in Europe. A budding mezzo-soprano opera singer and Formula One car-racing fan, she studied music at a private conservatory in Lausanne. She hasn’t been an active player in her family’s stewardship of Dow Jones and didn’t directly participate in any of the family meetings about the sale. Instead, she phoned from Europe. When the family’s final vote was under way in late July, she was sailing off the coast of Corsica.
Ms. Bancroft must be approved by the other directors. A vote is unlikely before News Corp.’s takeover of Dow Jones is finalized. The deal is expected to close shortly after a shareholder vote on Dec. 13.
Write to Matthew Karnitschnig at firstname.lastname@example.org and Sarah Ellison at email@example.com
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