Experts say News Corp can get antitrust nod for Dow

WASHINGTON/NEW YORK, May 2 (Reuters) News Corp.'s proposal to buy Wall Street Journal publisher Dow Jones&Co. Inc. would be unlikely to face much opposition from U.S. antitrust and regulatory authorities, experts said on Tuesday.

However, if the offer draws a counterbid from direct rivals to Dow Jones, there could be more questions asked by authorities, experts said.

The bid from News Corp. for Dow is not a done deal, as a representative of the publisher's controlling shareholders said they would vote against the bid.

Some media and analysts speculated that a counterbid could come from organizations like Bloomberg LP, a newspaper company like the Washington Post Co. or New York Times Co., or CNBC-owner General Electric Co. Bloomberg said there was no truth to speculation it may bid.

While a News Corp./Dow Jones combination would bring together two major media companies, the deal probably would not raise competition concerns because there is little overlap between their U.S.

businesses, antitrust lawyers said.

''This should not raise antitrust issues,'' said Steve Axinn, senior partner with the firm Axinn Veltrop&Harkrider LLP.

News Corp.'s U.S. assets include the Fox television network, Fox News Channel, 20th Century Fox movie studios and the New York Post.

Aside from the Wall Street Journal, Dow Jones assets include the MarketWatch Inc. financial Web site, Barron's financial weekly and Dow Jones Newswires.

Antitrust experts said the companies' major assets are, for the most part, in different markets and the combination would therefore not increase concentration in any particular market.

''I think any increase is minimal,'' said Bruce McDonald, a former Justice Department antitrust official with the law firm Jones Day.

RIVAL BIDS? GE and Bloomberg are the two most likely alternative buyers of Dow Jones, said Lawrence Haverty, associate portfolio manager of the Gabelli Global Multimedia Trust, which has stakes in both News Corp. and Dow Jones.

GE would not have antitrust issues buying Dow Jones, he said, while the electronic news business was so competitive that a Bloomberg/Dow Jones combination would be unlikely to raise major issues.

But some experts thought that a proposal to buy Dow Jones by a direct electronic news competitor could raise concerns.

''There you have some issues,'' said an antitrust lawyer who declined to be named.

McDonald noted that authorities could permit a purchase by a general circulation newspaper like the Washington Post or New York Times based on the argument that they also are in a different market than the Wall Street Journal.

A News Corp./Dow Jones combination, meanwhile, is not expected to raise any issues with the Federal Communications Commission as it does not involve the transfer of broadcast licenses, said a lawyer with consumer advocacy group Media Access Project.

Also, a combination of News Corp. and Dow Jones would not be in violation of FCC cross-ownership rules as the Wall Street Journal is seen as a national newspaper, not regional, said Media Access President Andrew Jay Schwartzman and Drinker, Biddle&Reath lawyer Howard Liberman.

Broadcast licenses in New York, where News Corp. owns both a newspaper and local stations, are up for renewal in June.

Liberman said the proposed transaction does raise questions in the FCC policy proceedings about big media companies getting bigger and ''gobbling up the lesser.'' The only area of overlap that could draw scrutiny of the Justice Department would be the combination of the Wall Street Journal and News Corp.'s New York Post, experts said.

But Axinn and other antitrust lawyers said the government would probably conclude that the Post, a local news tabloid, does not compete for the same readers and advertisers as a national financial paper like the Wall Street Journal.

Gabelli's Haverty thinks Murdoch is strategically the best bidder for the group, although Haverty believed if ''push came to shove'' and regulators told Murdoch he could not own both the Journal and New York Post, he would probably sell the latter.

REUTERS PBB BST0742