Tensions Build Between Investors and Newspaper-Controlling Families

TENSIONS BUILD BETWEEN INVESTORS AND NEWSPAPER-CONTROLLING FAMILIES
[SOURCE: Associated Press]
Family control of newspaper companies has long been seen as a necessary bulwark against shareholder pressure and unwelcome takeover bids, allowing publishers to focus on public service and the long-term health of their companies. Now that structure is under pressure like never before, as media baron Rupert Murdoch sets his sights on taking over Dow Jones & Co., publisher of The Wall Street Journal, and as shareholders raise a storm of protest over how the New York Times Co. is being run. On Friday, that pressure extended beyond newspapers to electronic news publishing as Reuters Group PLC, a major provider of financial information and news, said it had received a takeover approach. All three companies have protections against shareholder activism, but signs of strain are showing. Difficult economic times such as these are exactly what the founders of such companies had in mind when they put in place the two-tier share structures that allow families to retain stewardship over their companies, says Alex S. Jones, author of a book on a newspaper family dynasty and director of the Shorenstein Center on the Press, Politics and Public Policy at Harvard. Those protections may become harder and harder to maintain as Wall Street demands ever more accountability from publicly traded companies.
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