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Say what you will about Brad Greenspan, his track record, his maverick personality, and his oddball partners on the Dow Jones bid, his thoughts about how to develop WSJ.com and Down Jones’ digital properties are certainly worth a read. He has come out with an open letter to the DJ shareholders, detailing his team’s valuation mechanics, and the structure of the investment.
Among his plans: to provide $400 million to $600 million loan to members of the Bancroft family to buy out “liquidity-seeking” family members at $60 per share. Also, a recap of Dow Jones in which it would buy back 50 percent of outstanding shares at $60 per share and take on another $500 million in debt to fund DJ’s digital operations. Greenspan’s group would also receive two board seats under his proposal.
On the TV expansion side, he proposes launching a new Dow Jones/WSJ Financial News channel, competing against CNBC and the upcoming Fox Business Channel. With the major cost of content creation already being paid for by the WSJ print publication, start-up costs and losses are projected to be less then $60 million dollars in 2008 (vs. $75 million for FOX Business News).”
On the digital side, he is proposing a WSJVideo site: open, video-focused, ad-supported site. “In 2009, we would expect WSJVideo to generate 10 billion video views for the year. Using a $30 CPM rate, the venture will generate $243 million in revenue and $135.5 million in operating profits. ”
And then, taking on Yahoo Finance on online side, to open up WSJ.com in some parts, and keeping subscribers through exclusive access to differentiated content.