Battle of the Newspaper Families

May 2, 2007 — -- Call it the tale of two families.

They both have power and influence over the world's media, but that's about as far as the similarities go.

This week, the world learned that Rupert Murdoch, head of one of those families, was trying to buy out the vast holdings of the other family: the Bancrofts, owners of Dow Jones and its flagship newspaper, The Wall Street Journal.

The Bancrofts rejected the bid, but the family did not comment on whether or not it would accept any other offer -- from Murdoch or somebody else.

Murdoch is a brash media titan known for his hands-on approach managing his news outlets and from time to time, the content.

The Australian took over his family's business after the sudden death of his father in 1952.

His oldest son, Lachlan, was an integral part of the company but left after a family dispute. Lachlan's brother James has now filled his role.

The Bancrofts are almost polar opposites.

The Boston family does not involve itself in the day-to-day decisions of its media empire. And unlike Murdoch, who often puts himself in the spotlight, they are rarely seen.

"The Bancroft family isn't by and large involved in Dow Jones," said Benjamin M. Compaine, co-author of "Who Owns the Media?" and a researcher on media competition. "You've got a lot of second- and third-generation Bancrofts for whom it is an investment."

The personalities are even reflected in the news outlets each owns — the refined Wall Street Journal and Murdoch's News Corp., which includes Fox News, the New York Post and TV Guide.

While the Bancrofts own only part of the papers in their company, they keep an ironclad grip on its operations.

The Bancrofts, like the families behind America's other great newspapers, set up a two-tiered stock structure that essentially guarantees them control over the company's future.

Because of this two-tiered system, the family controls 64.2 percent of the votes, even though it owns only 24.7 percent of the overall stock.

But with three dozen members of the family, there is no guarantee that all shares will vote as a bloc.

The family said that members controlling 52 percent of the company's stock are against the bid. A higher offer or another suitor could theoretically sway enough family members to shift their votes to a sale.

Michael B. Elefante, the family's Boston lawyer and representative on the Dow Jones board, did not return a call to his office Wednesday.

Elefante is a partner in Hemenway & Barnes, the law firm that has represented the Bancroft family for decades. For three decades, Roy A. Hammer -- also a partner in the firm -- represented the family's interests but has recently shifted the responsibility to Elefante.

The Birth of an Empire

The Wall Street Journal was first published in 1882 by Charles Dow and Edward Jones.

The company was sold in 1902 to Clarence Walker Barron. When he died in 1928, the paper was passed on to his stepdaughters, Jane and Martha. Jane's husband, Hugh Bancroft, took over the company but killed himself in 1933.

Jane W.W. Bancroft's descendants now own the paper, but family members have not actively managed the media empire since Hugh Bancroft.

Jane Bancroft Cook, the last surviving child of Jane, died in 2002 at the age of 90. The company is now in the hands of Bancroft's grandchildren and great-grandchildren.

The New York Times Co. and The Washington Post Co. have stock structures similar to Dow Jones', which allows the Sulzberger and Graham families almost complete control over their respective media conglomerates.

The Bancrofts, however, are nowhere near as involved in the operations of Dow Jones as the Sulzberger and Graham families are in those of the Times and the Post.

For the past two years, shareholders of The New York Times Co. have tried unsuccessfully to strip down some of the Sulzberger and Ochs family power.

Arthur Sulzberger Jr., the company's chairman and publisher of its namesake newspaper, has long held that the company would not change its dual ownership structure. Sulzberger said that such a setup allows the company to maintain its journalistic independence and weather economic downturns.

Family-owned newspapers face increased pressure to sell, and their ownership gets diluted among more family members in subsequent generations. As those generations take on other jobs, family ownership dissipates further.

For instance, the family of former Vice President Dan Quayle last month sold its newspaper after more than 70 years of family ownership. The vice president's brother was president of the company until the sale, which the family attributed to the "challenging days for this business."

The Bancroft family includes investment bankers, writers, equestrians and philanthropists, according to a 2003 article in The New Yorker.

Leslie Hill, an American Airlines pilot and member of the family, spoke to the magazine about a possible sale, saying at the time, "anything is possible -- you never say never."