NEW YORK (Bloomberg) — Rupert Murdoch's News Corporation and Dow Jones & Company are closer to an agreement on a structure to protect editorial independence in a sale of the Wall Street Journal's owner, said two people briefed on the negotiations.Talks on News Corp.'s $5 billion offer for Dow Jones are at a critical stage, said people on both sides, who asked not to be identified because negotiations are confidential. The safeguards are a condition set by Dow Jones's controlling Bancroft family.

The Journal, the second-largest US newspaper in circulation, would give the 76-year-old Murdoch instant clout in US financial news. He also would get material from Barron's magazine and Dow Jones Newswires to fill his 110 newspapers and a planned Fox Business Channel. The Bancrofts have resisted a sale to Murdoch out of concern he would meddle with coverage.

"An acquisition of Dow Jones could be considered a crowning achievement to a spectacular career," said Richard Dorfman, managing director at Richard Alan Inc., a New York investment company. "Murdoch gets an iconic journalistic brand."

The board of New York-based Dow Jones last week took the lead in negotiations from the Bancrofts. Murdoch's chances improved after General Electric and Pearson Plc dropped plans for a bid on June 21.

Discussions, dormant most of this month, restarted June 22 when New York-based News Corp. received a proposal from Dow Jones that included the creation of a seven-member committee with two representatives each from News Corp. and the Bancrofts, and three family-chosen members approved by News Corp. The proposal also called for limits in how News Corp. could use the Wall Street Journal brand.

Murdoch's reaction to the proposal was negative and advisers worked through the weekend to revise the plan, the people said.

Michael Elefante, a lawyer for the Bancrofts, and News Corp. spokesman Gary Ginsberg didn't immediately return calls seeking comment. Dow Jones spokeswoman Linda Dunbar declined to comment.

Shares of Dow Jones fell $1.30 to $57.50 at 4:01 p.m. yesterday in New York Stock Exchange composite trading, down from $60.65 the day before GE and London-based Pearson, owner of the Financial Times, dropped out.

The decline below $60 indicates traders no longer expect a higher offer from Murdoch or another suitor. The News Corp. bid was 65 percent more than the stock's price before it was made public on May 1.

Class A shares of New York-based News Corp., also owner of the Fox television network and cable TV's Fox News, rose 20 cents to $21.81 and have climbed 1.5 percent this year.

Editorial oversight may be the biggest obstacle to a sale. Last night, the New York Times reported News Corp. and advisers representing Dow Jones and the family were working on a plan for a five-member committee to oversee the hiring of the Wall Street Journal managing editor and editorial page editor. The committee would be mutually chosen by News Corp. and the Bancrofts.

Dow Jones would bolster News Corp.'s planned financial news channel and help lure advertisers from Fairfield, Connecticut- based GE's CNBC, said John Morton, an independent newspaper analyst in Silver Spring, Maryland.

Dow Jones and CNBC compete with Bloomberg LP in providing financial news and information. Fox Business Channel, scheduled to start this year, will compete with Bloomberg TV.

To supply his business channel, Murdoch may need to buy out the Wall Street Journal's contract to share content with CNBC through 2012, said Michael Morris, analyst at UBS AG in New York who rates News Corp. "buy."

Murdoch started with one newspaper in Australia in 1952, becoming the largest publisher in Australia. News Corp. also owns the New York Post in the US, a Hollywood film studio and a satellite-TV business in Asia.

In the 1981 purchase of the Times of London, Murdoch consented to an autonomous editorial board with power to approve the hiring or firing of top editors. Murdoch broke his promises not to interfere, according to Harold Evans, who was editor of the Times for a year under Murdoch.

A sale to Murdoch would be a capitulation for the Bancrofts, who sought to attract other buyers for the company it has controlled since 1902.

The family's hands-off approach insulated the Wall Street Journal from outside influence. The newspaper, second to USA Today in circulation among US newspapers, has won 33 Pulitzer Prizes, fourth after the New York Times, Washington Post and Los Angeles Times.

After 2000, budget cuts at technology companies hurt advertising revenue. From a peak close of $76.75 in June 2000, Dow Jones shares fell to $36.55 on April 30, the day before Murdoch's offer was disclosed.

"The Journal never recovered from that," Morton said. "The stock price weakened the Bancroft family's resolution, particularly among the younger ones."

The family initially rejected Murdoch's offer, then on May 31 opened the bidding to all suitors.

The only alternative to emerge is a proposal by Brad Greenspan, the MySpace Web site co-founder, to pay $60 a share for 25 percent of the company. Greenspan fought the sale of MySpace parent Intermix Media to News Corp. in 2005.