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Eyes shift from Dow to Wall Street

Paper's future in question under News Corp

With News Corp.’s purchase of Dow Jones essentially complete, concerns now center on the future of the Wall Street Journal newsroom.

On Wednesday, Dow Jones CEO Rich Zannino–a key advocate for the deal–sent a memo to reporters in which he suggested that staffers could expect plenty of exposure through News Corp. properties.

“News Corp., through vehicles such as the Fox (network), its cable channels and interactive properties such as MySpace, has broad marketing platforms and channels of distribution to take our indispensable and differentiated content to new and bigger audiences,” he wrote.

But he also may have spooked some reporters when he tried to address concerns about potential newsroom cuts. “We can’t begin to predict the details of the integration to follow. In this interim, we’ll do our best to keep you informed,” he wrote. “We’ll try in particular to advise as soon as possible of any developments that might affect you directly.”

Though the WSJ covered the story with a ferocity that was at time both impressive and self-reflexive–right down to details like the Australian Shiraz that News Corp. directors sipped to celebrate the deal–many reporters were thought to be opposed.

Steve Yount, president of IAPE’s local 1096, the union repping about 2000 employees, said that the group was “disappointed” with the outcome but that he hoped the positions of dissident Bancrofts “will impress upon Dow Jones’ new owners that the success of our products has always been based on a foundation of integrity and trust.”

Union is set to begin negotiating a new contract shortly.

News also set off a wide-raging wave of predictions among pundits.

The Poynter Institute’s Rick Edmonds predicted that Murdoch will usher in a British invasion. “I read him to be a believer in the natural superiority of British and Australian journalists,” he wrote. “I would be surprised if he doesn’t try to infuse some of that into the Journal.”

Others meanwhile, raised the possibility that a Murdoch-owned WSJ was not necessarily a long-term certainty

“Despite what he may think, Murdoch, 76, won’t live forever – and after he goes, his family’s control of News Corp. is far from permanently assured,” wrote Allan Sloan in Fortune.

News Corp. will pay $5.6 billion for the financial-news company in a deal that’s expected to close within the next three months. While the deal still needs to be approved by shareholders, that move is expected to be a formality.

About 37% of the Bancroft’s 64% of voting stock approved the merger. While about 7% of the remaining stock, held by the Ottaway newspaper family, is expected to vote against the merger, most of the remaining shares are expected to approve it

The companies on Wednesday also announced the makeup of the five-member board that will be put in place to ensure the Wall Street Journal’s editorial independence.

They include AP honcho Louis Boccardi, longtime editorialist Thomas Bray, former Congresswoman Jennifer Dunn, ex-Tribune exec Jack Fuller and new media guru Nicholas Negroponte. Bray, who once served as the editorial page editor at the Detroit News and also contributes to OpinionJournal.com, will be the group’s chairman.

But what kind of power they will have and how they will enforce that power remained open questions as the merger moves forward.

The agreement was filled with tautological legalese (“Whereas, pursuant to the Merger Agreement, (i) each of the Company and Dow Jones is required to adopt, execute and deliver, and comply with, and cause its subsidiaries, as applicable, to comply with, this Agreement”).

But it did spell out a few areas of oversight, including the hiring of key editors and “control over spending and allocation of resources within departmental budgets set by the Company or Dow Jones management.”

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