The Bancroft family, which has controlled the prestigious Wall Street Journal for more than a century, is the latest newspaper dynasty to be dismantled by the pressures of the Internet age.
Its agreement Tuesday to sell Dow Jones & Co., The Journal’s parent, for $5 billion to media mogul Rupert Murdoch’s News Corp. shows how the industry’s most powerful families have faced a tough choice: Cash out or watch their fortunes deteriorate as more readers and advertisers migrate to online news sources such as Yahoo and Google.
Before the recent sell-offs, family-owned newspaper chains were considered the bulwark against corporate ownership, which had already accounted for control of other media businesses, such as television and movie studios.
For some families, the news- gathering business was not just about the bottom line. It was about performing a civic duty.
But that belief eroded as the dynasties, founded in the 1800s, entered their third, fourth and fifth generations, expanding to dozens of family members who collect dividends but have little commitment to journalism.
“Journalism is being redefined whether we like it or not,” Robert Decherd, who, with his sister, controls Belo Corp., owner of The Dallas Morning News, the Riverside (Calif.) Press-Enterprise and the Providence (R.I.) Journal. “The resistance in the news industry to consolidation has declined – and that’s before you introduce the phenomenon of fourth- and fifth-generation ownership.”
The Journal’s fate was determined by three dozen Bancrofts, who held their stock in a maze of complicated trusts. No family member has had a career in management there since William Cox Jr. retired more than a decade ago.
The sale follows the recent exit from the business of several other newspaper clans:
In February, the Chandler family, which formerly owned the Los Angeles Times, cut its 116-year industry ties by selling its stake in the parent company as part of a pending takeover by real-estate mogul Sam Zell.
Last year, Tony Ridder, scion of the family that once shared control of Knight Ridder Inc. with the Knight family, threw in the towel on the industry and sold out to McClatchy Co. after the family had spent 114 years in the business.
Newspaper analyst John Morton, who has consulted for some of the biggest privately owned chains, likened the dismantling of newspaper dynasties to the disappearance of small family farms.
“It’s like the farmer who leaves the farm to the family and divides it evenly,” Morton said. “A couple of generations go by, and all of a sudden you’re sitting on an acre.”
A 1-acre farmer is a farmer looking to sell, and the same is true for newspaper families. Only 1 in 10 survives the third generation, according to the Family Business Center at Chicago accounting firm Blackman Kallick.
Some of the best-known newspaper companies are passing that milestone. The New York Times Co., controlled by the Sulzberger family, passed the title of chairman to a fourth-generation publisher in 1997, and the third-generation chief executive of The Washington Post Co., Donald E. Graham, turned 62 this year.
