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    August 01

    Dow Jones deal gives Murdoch a coveted prize

    Vince Natale

    Rupert Murdoch finally won his long-coveted prize yesterday, gaining enough support from the deeply divided Bancroft family to buy Dow Jones & Company, publisher of The Wall Street Journal and one of the world’s most respected news sources, for $5 billion. Dow Jones said early today that the companies had signed a definitive merger agreement after the boards of both companies voted last night to approve the deal.

    For Mr. Murdoch, the verdict represents the pinnacle of his long career building the News Corporation into a $70 billion media empire that already includes more than 100 newspapers worldwide, satellite broadcast operations, the Fox television network, the online social networking site MySpace and many other parts.

    Combined with the planned beginning of the Fox business news channel in October, the purchase of Dow Jones makes Mr. Murdoch the most formidable figure in business news coverage in this country, perhaps worldwide.

    It also gives a larger voice in national affairs to an owner whose properties often mirror his own conservative politics.

    The decision signals the end of an era for Dow Jones and the Bancroft family, an intensely private clan that for generations had allowed The Journal to operate independently and become one of the nation’s most prominent and trusted newspapers, even as its finances deteriorated.

    Dow Jones said today that family trusts and family members representing about 37 percent of the total shareholder vote had committed to support the deal.

    For four months, some three dozen members of the family had engaged in an intense, sometimes tearful debate about The Journal’s future, at times pitting siblings against one another and children against their parents.

    The final decision was in doubt well past the 5 p.m. Monday deadline set for the family. In a twist in already tortured negotiations, some family trustees demanded that the News Corporation pay the fees for the family’s bankers and lawyers — which could reach $40 million — in return for their support. After an exhausting night of conferences calls, the deal was made.

    James B. Lee of JPMorgan Chase & Company, who has represented clients in some of the biggest deals in history, said of Mr. Murdoch, “nobody else I have ever banked could have pulled it off.”

    For the rest of the industry, the deal, which follows the recent sale of Knight Ridder and the pending sale of the Tribune Company, again raises the question of whether newspapers can exist independently of giant media conglomerates, as advertising dollars migrate to the Web and readers have access to vast new sources of online information.

    Mr. Murdoch has talked of pumping money into The Journal, bolstering its coverage of national affairs and its European and Asian editions, which could pose a serious challenge to competitors like The Financial Times and The New York Times. That could mean losing money in the short run, something Mr. Murdoch has always been willing to do to attract readers and gain influence.

    Some Dow Jones employees see having such a wealthy, engaged owner as an improvement after years of uncertainty. Still, there was no official announcement at The Journal’s newsrooms, where some reporters mourned the loss of independence.

    “It’s sad,” said a veteran reporter at one of the domestic bureaus, who did not want to be named because of concerns over his career. “We held a wake. We stood around a pile of Journals and drank whiskey.”

    News reports of the deal initiated an outpouring of comments on The Journal’s own Web site, many critical of the News Corporation, and some regrets from other shareholders.

    “It’s a bad thing for Dow Jones and American journalism that the Bancroft family could not resist Rupert Murdoch’s generous offer,” James H. Ottaway Jr., a former Dow Jones executive and a major shareholder, said yesterday. “I hope Rupert Murdoch, and whoever follows him at News Corporation, will keep his promises to protect and invest in the unique quality and integrity of The Wall Street Journal, Barron’s and all the Dow Jones electronic news services.”

    It will most likely take three to four months for the transition in ownership to take effect. At the family’s insistence, the News Corporation has agreed to retain the top editors at Dow Jones, including Marcus W. Brauchli, the managing editor of The Journal and Paul Gigot, The Journal’s editorial page editor, and has accepted limits on its ability to remove or replace people in those posts.

    The Bancrofts hope the arrangement, which they negotiated before the final deal, will restrict Mr. Murdoch’s ability to influence content, particularly in The Journal, but many media experts have said he has circumvented similar agreements in the past.

    Mr. Murdoch first made his offer to Dow Jones’s chief executive, Richard F. Zannino, over breakfast on March 29, and made a formal written bid to the board on April 17, but the news did not surface until May 1.

    On May 2, Mr. Zannino made a presentation to the Dow Jones board that made it seem to many of them that the company’s prospects on its own were poor and that he favored a sale. He later insisted that he had not meant to give those impressions, but even so, the presentation had a sobering effect, and most of the board clearly thought that the company should accept Mr. Murdoch’s $60-a-share offer.

    That breakfast with Mr. Murdoch set in motion a four-month struggle among the Bancrofts. The family, which has owned Dow Jones since 1902, holds 64 percent of the shareholder vote, with most of the stock held in dozens of trusts with some three dozen beneficiaries. But the bulk of the voting power rests with a handful of the family’s oldest generation, and with longtime family lawyers, who are the primary trustees.

    Some argued vociferously that Mr. Murdoch would damage the newspaper’s credibility, while others said that his $60-a-share offer — for a stock that was trading around $36 in April — was too good to pass up at a time when the newspaper industry was struggling.

    At the outset, most of the elders opposed a sale, and were bolstered by newsroom employees who wrote letters arguing that Mr. Murdoch would wreck The Journal, and by the advice of longtime associates like Peter R. Kann, the recently retired former chairman and chief executive of the company, and Mr. Ottaway.

    But many of their children, less wealthy and less steeped in the notion of Dow Jones as a family legacy, were more open to selling. A family Dow Jones stake that had been valued at about $750 million and generated about $20 million a year in dividends, mostly for the older generation, stands to become more than $1 billion even after taxes and could produce several times as much income.

    Late last week, it appeared that the family might reject the deal, but then two pivotal family elders who had argued against the deal, Jane Cox MacElree and her brother, William C. Cox Jr., shifted positions; she relinquished voting control of some shares, and he switched sides and decided to support the sale, people close to the family said. That left things too close to call.

    While the weeks after May 2 had been spent arguing over principles, the last few days were spent haggling over money. Before the deal had a clear majority in support, a lawyer for the family, Lynn Hendrix, based in Denver, who controlled trusts with 9 percent of the overall vote, insisted that those trusts would oppose the deal unless the News Corporation agreed to pay a premium for the supervoting shares that are mostly owned by the Bancrofts.

    On Sunday night, David F. DeVoe, the News Corporation’s chief financial officer and a board member, called Mr. Hendrix, a partner at the firm Holme, Roberts & Owen, to draw a line in the sand.

    Referring to the $60 price, Mr. DeVoe said, “I can six-zero-point-zero-zero,” a person briefed on the conversation said, “not six-zero-point-zero-one.”

    When Mr. Hendrix kept pushing for more money, Mr. DeVoe made an unusual offer: the News Corporation would consider paying the fees and expenses of the bankers and lawyers advising the trusts. That amounted to an indirect way of sweetening the offer for the supervoting shares without adding much to the cost of the deal. Dow Jones, after consulting with the News Corporation, had already agreed to cover some of the costs of paying Merrill Lynch, the family’s primary financial advisers.

    After a marathon series of conference calls that night that ran through Monday, involving Mr. DeVoe; Mr. Hendrix; Michael B. Elefante, the family’s primary lawyer and trustee; and Richard Beattie, a lawyer advising the Dow Jones board, a deal was brokered that would allow the Denver trust to vote in favor. The News Corporation agreed to pay advisory expenses for all of the family trusts, a figure that people involved in the talks said could reach $40 million, which translates to about an additional $2 a share for the Bancrofts.

    The largest share, perhaps as much as $18.5 million, will be paid to Merrill Lynch, people briefed on the matter said. Another payment of as much as $10 million is expected to be paid to Wachtell, Lipton, Rosen & Katz, a law firm representing the family. Morgan Stanley, which advised the Denver trusts, and a series of law firms are expected to split the rest.

    The issue of the News Corporation and Dow Jones paying the family’s advisers has raised questions in some circles — including among some family members, people close to them say — about the advice’s impartiality. Merrill Lynch, in particular, was viewed as an early supporter of the deal and was responsible in large part for making presentations to the family about the current and future health of Dow Jones.

    The deal is also a windfall for an army of Mr. Murdoch’s bankers and lawyers. Mr. Murdoch was advised by Mr. Lee, who had helped Mr. Murdoch when he explored a bid for Dow Jones in 2001 and had set up Mr. Murdoch’s first introduction to Mr. Zannino.

    Blair Effron, a former banker at UBS who started his own boutique firm, Centerview Partners, spent many nights holed up at Mr. Murdoch’s headquarters, as did Stanley S. Shuman of Allen & Co., the media investment bank.

    To the last, people inside and outside Dow Jones who opposed the sale were trying to arrange alternative deals that would allow some Bancroft family members to sell and others to keep control of the company.

    Yesterday, Leslie Hill, a family member and trustee who became something of a patron saint within the Journal’s newsroom for her opposition to the deal, resigned from the company’s board.

    July 23

    Under New Management

    Wellness Programs Try to Be Welcoming, Too

    By KELLEY HOLLAND

    Sean Kelly

    AH, July: an ideal time of year for morning runs, long swims, family bike rides and picnic tables laden with seasonal produce. In short, it’s healthy time.

    Unfortunately, it’s also health care time — when managers must contend with rising health insurance premiums as they plan next year’s budget.

    What is a cost-conscious manager to do? The answer of the moment is to provide a wellness program, promoting healthy behavior year-round.

    According to a survey by the Hay Group, a consulting firm, more than half of all large companies offer some combination of services like nutrition education, weight management assistance, health risk assessments, and help with quitting smoking; more than a quarter offer things like fitness coaching and discounts on health club memberships.

    “I was basically out of the business for the better part of the decade,” said Michael Carter, a vice president at Hay responsible for employee health management consulting. “Now everybody’s my new best friend.”

    On the surface, it is hard to see anything wrong with urging employees to tone up and trim down. A fitter work force is a happier work force, and less costly, too.

    But wellness programs can be minefields. Some employees may resent the programs, viewing them as examples of father-knows-best intrusiveness. At least one program has even formed the background for a lawsuit.

    The biggest challenge of wellness programs is to reach the employees who would get the most out of them. Gym rats will always take advantage of benefits like discounted health club memberships — but they would probably work out anyway, and discounts may not be enough for those who are seriously overweight or out of shape.

    Personalized incentives like fitness coaching and nutrition counseling are often a better way to reach employees in the middle group who just need a little encouragement. It is also crucial to make accommodations for disabled employees.

    And the tone taken is crucial: who wants the boss telling you to eat your spinach? A program that feels coercive will probably never be as popular as one with positive incentives, like cheaper health insurance.

    Employees respond best to wellness programs that are presented as a form of organizational change, rather than as a top-down imposition of new requirements, according to a study of 243 employees by Ellen Ernst Kossek, a professor of human resource management and organizational behavior at Michigan State University, and two colleagues.

    “It shouldn’t be, ‘Here’s this program,’ ” she said. “It should be linked to ‘How do we make a workplace that’s healthy for everyone.’ ”

    Scotts Miracle-Gro has one of the most extensive wellness programs on offer. Services include personalized fitness coaching and a $5 million wellness center at its headquarters in Marysville, Ohio, with a gym and medical facilities. The company also has a policy against hiring workers who smoke, where state law permits.

    Participation in Scotts’ wellness programs is high — but the company has also seen an unexpected side effect from its efforts.

    Last year, Scott Rodrigues filed suit against the company in Massachusetts, saying that Scotts fired him after a drug test found nicotine in his system and that the company’s antismoking policy violated his civil rights.

    Harvey Schwartz, Mr. Rodrigues’s lawyer, said the case was also an example of benefits discrimination, where a company dismisses an employee to avoid high benefits costs.

    In a motion to dismiss the case, which is pending, Scotts said that Mr. Rodrigues had not actually been hired but had been offered a job on the condition that he pass a drug screen, including a test for nicotine.

    “When you look at controlling costs,” said Su Lok, a Scotts spokeswoman, smoking “is something that employers are really taking a stand on.” The company had no comment on the specific case because it is ongoing.

    Union Pacific Railroad has had a smoother ride with its longstanding wellness program. The proportion of health insurance claims related to lifestyle has dropped by 11 percentage points over 11 years, said Marcy Zauha, the company’s director for health and safety.

    Union Pacific, based in Omaha, offers some companywide wellness benefits, including health risk assessments and stop-smoking plans. But much of the program, including regional walking contests and group weight-loss efforts, is administered locally. Managers’ health promotion initiatives are included in their annual reviews.

    “We’ve tried to build health into our existing culture,” Ms. Zauha said.

    FiServ, a financial services technology company based in Brookfield Wis., created a wellness program in 2005 to better recruit and retain employees.

    FiServ employees who fill out a health risk assessment receive a sizable discount on their monthly health insurance premium. There are also companywide fitness challenges: in a recent eight-week walking contest, participants were issued pedometers, and anyone who walked 7,000 steps a day received a prize.

    Teams have to been known to question whether their rivals really log the number of steps claimed. But that was fine with Linda Schuessler, manager of wellness promotion.

    “As long as they’re engaged,” Ms. Schuessler said, “we don’t really mind those concerns.”

    March 28

    Burger King Shifts Policy on Animals

    By ANDREW MARTIN

    In what animal welfare advocates are describing as a “historic advance,” Burger King, the world’s second-largest hamburger chain, said yesterday that it would begin buying eggs and pork from suppliers that did not confine their animals in cages and crates.

    The company said that it would also favor suppliers of chickens that use gas, or “controlled-atmospheric stunning,” rather than electric shocks to knock birds unconscious before slaughter. It is considered a more humane method, though only a handful of slaughterhouses use it.

    The goal for the next few months, Burger King said is for 2 percent of its eggs to be “cage free,” and for 10 percent of its pork to come from farms that allow sows to move around inside pens, rather than being confined to crates. The company said those percentages would rise as more farmers shift to these methods and more competitively priced supplies become available.

    The cage-free eggs and crate-free pork will cost more, although it is not clear how much because Burger King is still negotiating prices, Steven Grover, vice president for food safety, quality assurance and regulatory compliance, said. Prices of food at the chain’s restaurants will not be increased as a result.

    While Burger King’s initial goals may be modest, food marketing experts and animal welfare advocates said yesterday that the shift would put pressure on other restaurant and food companies to adopt similar practices.

    “I think the whole area of social responsibility, social consciousness, is becoming much more important to the consumer,” said Bob Goldin, executive vice president of Technomic, a food industry research and consulting firm. “I think that the industry is going to see that it’s an increasing imperative to get on that bandwagon.”

    Wayne Pacelle, president and chief executive of the Humane Society of the United States, said Burger King’s initiatives put it ahead of its competitors in terms of animal welfare.

    “That’s an important trigger for reform throughout the entire industry,” Mr. Pacelle said.

    Burger King’s announcement is the latest success for animal welfare advocates, who were once dismissed as fringe groups, but are increasingly gaining mainstream victories.

    Last week, the celebrity chef Wolfgang Puck announced that the meat and eggs he used would come from animals raised under strict animal welfare codes.

    And in January, the world’s largest pork processor, Smithfield Foods, said it would phase out confinement of pigs in metal crates over the next decade.

    Some city and state governments have banned restaurants from serving foie gras and have prohibited farmers from confining veal calves and pigs in crates.

    Temple Grandin, an animal science professor at Colorado State University, said Smithfield’s decision to abandon crates for pregnant sows had roiled the pork industry. That decision was brought about in part by questions from big customers like McDonald’s, the world’s largest hamburger chain, about its confinement practices.

    “When the big boys move, it makes the entire industry move,” said Ms. Grandin, who serves on the animal welfare task forces for several food companies, including McDonald’s and Burger King.

    Burger King’s decision is somewhat at odds with the rebellious, politically incorrect image it has cultivated in recent years.

    Its commercials deride “chick food” and encourage a more-is-more approach to eating with its turbo-strength coffee, its enormous omelet sandwich, and a triple Whopper with cheese.

    Burger King executives said the move was driven by their desire to stay ahead of consumer trends and to encourage farmers to move into more humane egg and meat production.

    “We want to be doing things long before they become a concern for consumers,” Mr. Grover said. “Like a hockey player, we want to be there before the puck gets there.”

    He said the company would not use the animal welfare initiatives in its marketing. “I don’t think it’s something that goes to our core business,” Mr. Grover said.

    Beef cows were not included in the new animal welfare guidelines because, unlike most laying hens and pigs, they continue to be raised outdoors. Burger King already has animal welfare standards for cow slaughter, he said.

    The changes were made after discussions with the Humane Society and People for the Ethical Treatment of Animals, known as PETA.

    PETA, in particular, has started a series of high-profile campaigns to pressure fast-food companies to change their animal welfare practices, including a “Murder King” campaign that ended in 2001 when Burger King agreed to improve its animal welfare standards to include, among other things, periodic animal welfare audits.

    Since that time, PETA officials said they had met periodically with Burger King officials to encourage them to adopt tougher standards. About a year ago, the Humane Society began its own efforts to encourage Burger King to improve its farm animal standards.

    Mr. Grover said his company listened to suggestions from both groups, but ultimately relied on the advice of its animal welfare advisory board, which was created about six years ago and includes academics, an animal welfare advocate, an executive of Tyson Foods and Burger King officials.

    “Where we think we can support what our animal advisers think is right, we do it,” Mr. Grover said.

    The changes apply to Burger King suppliers in North America and Canada, where the chain purchases more than 40 million pounds of eggs a year and 35 million pounds of pork, he said.

    A reason that such a small percentage of purchases will meet the new guidelines is a lack of supply, Mr. Grover said.

    Burger King plans to more than double its cage-free purchases by the end of this year, to 5 percent of the total, and will also double its purchases of pork from producers who do not use crates, to 20 percent.

    Most laying hens in the United States are raised in “battery cages,” which are usually stacked on top of each other three to four cages high. Sows, during their pregnancies, are often kept in gestation crates, which are 24 inches across and 7 feet long.

    Matt Prescott, PETA’s manager for factory farm campaigns, argued that both confinement systems were filthy and cruel because the animals could barely move and were prone to injury and psychological stress.

    Under Burger King’s initiative, laying hens would be raised in buildings where they would be able to wander around. Similarly, sows would be raised indoors, most likely in pens where they would be able to move freely.

    “This is not free range, but simply having some room to move around inside a controlled environment,” Mr. Grover said.

    While converting barns for crate-free sows is relatively simple, Ms. Grandin said it was much more difficult and expensive to raise cage-free hens because not nearly as many birds fit in one building.

    Burger King officials say they hope that by promoting controlled-atmosphere stunning, more slaughterhouses will adopt the technology. Currently, there are only a few in the United States using the technique, and most of them process turkeys.

    June 24

    Harley-Davidson VRSC X-Rod: Himmlischer Primus

     

    [Bild: Motosport Schweiz]
    Neue Harley-Davidson-Bikes bleiben selten so, wie sie aus der Kiste kommen. «Customizing» heisst das Zauberwort

     
     Das Veredeln bzw. Personalisieren gehört bei der Traditionsmarke aus Milwaukee einfach dazu.

    So sieht es auch Rainer Bächli von Harley-Heaven in Dietikon, dessen radikal getunte Harley-Davidson X-Rod an der Schweizer Tuning und Customizing Show «Swiss Performance» in Zürich den Titel «Best of show» abgestaubt hat.

    Die Highlights: Eine mächtige aber nicht übertriebene 280er-Hinterradwalze, die aggressiv anmutende matt-schwarze Lackierung, Lachgaseinspritzung, 200 PS.