The poor WSJ Bancrofts. Here they wanted to be regarded as not just “another rich family” but as protectors of the world’s last bastion of journalistic integrity. Then, after four months of wrangling that revealed them to be not only clueless about the business but as fractured and emotional as most fabulously wealthy extended families, they instead decided to take the money and run. And now it appears that what finally persuaded them to vote “yes” on the deal was not Murdoch’s promises, the sickly state of Dow Jones, or upheaval in the newspaper business, but a $40 million special-family-shareholder bribe–delivered in the form of free advisory fees.
And, yes, there’s the sub-scandal dominating the headlines, which is that the Bancrofts’ various advisors, like most M&A folks, stood to make a lot more if the deal went through than if it didn’t. But the sexiness of this scandal eludes us. Deal advisors always make more when deals go through (and are therefore always conflicted), and we’re not sure why it matters where the fees were coming from.
We understand why the advisors might have stumped for Murdoch’s proposal instead of the crackpot one floated by MySpace founder Brad Greenspan–after this deal is ancient history, Murdoch will still be shelling out hundreds of millions in advisory fees. But why does it matter whose pocket the Bancroft fees are coming out of? If the Bancrofts had voted “yes” before the $40 million fee bribe, they’d just have had to dig into their own pockets. And although this would apparently amounted to a cataclysm for the family, we don’t see why it would have mattered to the advisors.