Talking Biz News

Information about business
journalism from the
Carolina Business News Initiative.

Margaret Heffernan, writing on The Huffington Post, writes Friday about the “sado-masochistic sport that is now TV business coverage.”

Heffernan wrote, “Recession? What recession? Whether you’re watching CNBC or just browsing through newsstands, that’s what seems to be on everyone’s mind. Are we in a disaster, heading for a disaster - or really pretty okay? Pundits on TV screen squack endlessly: we are going down the tubes, we are already at the bottom, or well, ya’know, it’s not really so bad. Jack Welch says one thing, Warren Buffet says another. Our favourite witch doctors peddle hope and hysteria. Who should you believe?

“Believe no one. Why? Because nobody knows. This parlor game of guessing the future, for all that it’s laden with data and charts, is still just hocus pocus. The future (of markets and everything else) is not written and you can’t steal a peak at the end of the book to see how it ends. The complexity of world markets is so immense that no one can model it, never mind predict it.”

Read more here.

Myron Kandel, a two-time president of the Society of American Business Editors and Writers, founding business editor of CNN and a longtime business journalist, has this message for newspapers cutting their business sections: You’re making a mistake.

Kandel, in an editorial on PBS’ “Nightly Business Report” show, stated, “Just under 30 years ago, there was a vast wasteland of business news on American television. This program was a shining exception, but it was not yet network. CNN was yet to be born. CNBC wasn’t even a gleam and Rupert Murdoch was still just a press lord, not yet a multi-media mogul. Business news was coming into its own in many local newspapers, producing comprehensive and even investigative journalism. As more and more Americans became investors, those papers added staff, space and stock tables and even created stand-alone business sections. The bigger papers also added heft and the ‘Wall Street Journal’ began winning more and more Pulitzer prizes. Business stories appeared regularly on page one. Business journalism in newspapers wasn’t perfect, but it was flourishing.

“Nowadays, sadly, papers are cutting back on their daily business sections, folding them into their main pages and reducing staffs. Stock tables are vanishing and, of course, television and the web have become major factors. I know that profit pressures on the industry and there are lots of alternative sources of business news. Weeklies and monthlies do some very good work. But when it comes to continuing local coverage, there’s no substitute for a quality local newspaper section. If the cuts continue, I think readers and the business community will both suffer and so will the papers themselves.”

Read more here.

TheDeal executive editor Yvette Kantrow writes Friday about the recent mergers and acquisitions coverage in The New York Times and Wall Street Journal, and notes that a Times column about M&A by Andrew Ross Sorkin.

Kantrow wrote, “‘The problem is that most CEOs don’t have the guts to make acquisitions when everyone is running scared,’ Sorkin writes. ‘That is usually during a volatile market — like the one we’re living in now. Which is exactly the wrong approach.’

“Maybe for Sorkin it is — after all, who wants to cover M&A when there aren’t a lot of deals? But what about some of his colleagues at The New York Times’ business section? Do they think CEOs should get out there and start dealmaking?

“We’re thinking, of course, of Gretchen Morgenson, who has been waging a jihad against mergers in the pages of the Times for years. (Who can forget her classic jeremiad, ‘What Are Mergers Good For?’, in The New York Times Magazine in 2005?) Morgenson’s imposing shadow looms over Sorkin’s column from the get-go, when he sets up a straw man by declaring ‘Most mergers fail. If that’s not a bona fide fact, plenty of smart people think it is’ and then goes on to list some of those ’smart people’ — McKinsey, Harvard, Booz Allen, etc., etc.

“But where is Gretchen on that list? Where is the Times itself? Where, for that matter, is most of the media, which during the last merger boom turned decidedly and reflexively hostile toward deals — a hostility fueled by hedge funds, activist shareholders and governance gurus well schooled in the art of spin?”

Read more here.

John Koblin of The New York Observer writes Friday that an attorney who has represented The Wall Street Journal for more than a decade has been fired, leaving many journalists at the paper upset about the decision.

Koblin wrote, “The lawyer, Stuart Karle, has been with the newspaper since 1992. Yesterday afternoon, Mr. Karle was called into the office of Dow Jones’ counsel, Mark Jackson (Mr. Jackson was formerly the associate chief counsel of Harper Collins and was made the chief counsel of Dow Jones on Dec. 17, two work days after Mr. Murdoch closed on his sale of the company).

“Yesterday, Mr. Karle walked into Mr. Jackson’s office and was told he was fired and he had to leave the paper by the end of March, according to a person familiar with the situation. Two newsroom sources said that the paper’s managing editor, Marcus Brauchli, had no say in the decision.

“The Journal newsroom today, described one staffer, is ’stunned.’

“‘We’re pissed,’ said another. ‘Stuart understands our culture, he comes from within our culture. Why is Murdoch bringing in someone from Harper Collins? Symbolically, it’s a bad move. It doesn’t give you a lot of confidence that Murdoch really values the culture of this place.’”

Read more here.

Stuart handles news-related issues for The Journal and other Dow Jones publications. He earned a bachelor’s degree at Columbia and then became a reporter for a Dow Jones newswire before attending law school at the University of Chicago.

A business journalist that I know contacted me this morning with the following scenario. He wanted to know if what happened was an ethical problem for his publication. I have deleted the names of the company and the publication involved.

Here is the journalist’s explanation:

“The handful of people working on the story were funneling information through the Web editor. (It usually goes through me first, but again, deadline pressure.) So the editor who had talked to this source at [the company] passed along the information to the Web editor, who in turn put a story up without my seeing it.

“A few minutes later, I get a call from someone at [the company] who’s quoted in the story. She says she never talked to anyone at [my publication] and is a little confused about what happened. I went and talked to my boss, and it turns out that he talked to a different person at [the company]; both agreed, for reasons I don’t quite get, to purposely misattribute the quote to the other PR type who we wound up quoting. Apparently, this was something agreed upon by my editor and the person he actually did talk to.

“Neither found it a big deal. It’s certainly not plagiarism. But it’s also not the first ethically stretched thing we’ve done since I’ve been here. Others have noticed and shrugged and carried on with their business.”

Here was my response:

“I’d like to know more about the person to whom the editor talked to. Was it another PR person?

“PR people all the time feed business journalists quotes from people within their company that they have probably made up themselves. They’re putting words in people’s mouths for them. To me, that’s an ethical question for the company and its PR people, not for you. If you are getting a quote from a PR person or a company representative that
they say can be attributed to someone else at the company, then you use it. If the person to whom the quote is being attributed doesn’t know about it, then the company has a problem, not you or your publication.”

What do others think?

CNBC’s morning show “Squawk Box,” with 67,000 viewers in the adult 25 to 54 demographic, had its best February since 2003 in that age group, and is up 2 percent from last February

The show also had its best month in adults between the agees of 25 to 54 since April 2007. The increased viewers comes as other CNBC shows have seen a decline in that age demographic.

Also, ”Squawk Box” broke major news Friday morning when billionaire investor Wilbur Ross on the show that he would invest $1 billion in bond insurance company Assured Gauranty.

Ross told CNBC the deal has been in the works for several weeks, and  described the investment in Assured Guaranty as “opportunity capital rather than damage-curing capital.”

“We’ve looked at quite a few of the financial guaranty companies, and the reason that we picked Assured for our first point of entry is a pretty straightforward one,” he said.  “The other ones, by and large, need capital simply to preserve their triple-A rating status.  Assured is one of the few that’s ranked as a strong, stable triple-A, even without our capital.”

Marketwatch media columnist Jon Friedman writes Monday that The Economist continues to gain more U.S. readers because it is targeting their intellectual curiosity.

Friedman wrote, “Even without the ever-newsworthy Spears gracing its pages, the Economist is making its mark in the U.S. Spokesman Justin Hendrix told me that the magazine expects to show 13% circulation growth in its upcoming filing, on top of the 8.5% jump in the number of advertising pages in 2007. With a circulation of about 722,000 in North America now — and more than 1.3 million in total — the magazine intends to crack the 1 million threshold on this continent in the next five years.

The Economist prides itself on being relevant to its readers. ‘We think there is an ever-growing number of people who want an intelligent read,’ Micklethwait, 45, said. ‘People who read the Economist knew the problems with housing all over the world, the Islamic extremism, food prices and even bin Laden.’

The Economist is thriving in the U.S. because it frequently succeeds in being different from the American media. The Economist is decisive, but not shrill. Its stories in the magazine and on the Web have a sense of urgency, but don’t reek of hype.

Read more here.

Jeff Zucker, the head of NBC Universal, the parent of CNBC, spoke Wednesday at the Harvard Business School media and entertainment conference and suggested that the launch of Fox Business Network has made his business news network better.

Broadcasting & Cable reported, “Zucker also mused on News Corp.’s $ 5 billion acquisition of Dow Jones and its crown jewel, The Wall Street Journal.

“‘Obviously, Dow Jones is a fantastic company,’ he said. ‘Whether it’s worth the price News Corp. paid for it, time will tell. It’s easier to pay that price when the only shareholder you care about is the one you see in the mirror every day,’ he quipped, referring to News Corp. chief Rupert Murdoch.

“He conceded that News Corp.’s Fox Business Network — which will surely mine the talent at The Wall Street Journal once the newspaper’s exclusive content agreement with CNBC expires in 2012 — has been healthy competition for CNBC.

“‘It made our game better,’ he added. ‘And it brought more attention to CNBC than we could have ever bought.’”

Read more here.

A panel of expert journalists and a compensation consultant gave more than 100 business reporters useful advice on how to figure out CEO pay, pensions and severance in a training teleconference Wednesday sponsored by the Society of American Business Editors and Writers.

The 90-minute conference, accompanied by a Web-based presentation of key points and sample securities documents, was timed to coincide with the start of the proxy season. It offered detailed guidance on the SEC’s revised rules for company disclosure of executive compensation, including:

• what’s new this year in how companies are presenting their information on compensation;
• how to analyze a company’s policies on performance and compensation;
• an explanation of The Associated Press’s formula for determining a bottom-line pay figure from the compensation and stock awards tables in a proxy filing, as well as discussion of alternative formulas;
• how to find details on bonuses, stock grants, options and other forms of compensation;
• how to look at severance and pension plan disclosures;
• looking at compensation in terms of what’s granted versus what’s actually pocketed;
• how to distinguish between guaranteed pay and “at riskâ€? pay;
• how benchmarking works in setting, and sometimes inflating, pay levels.

The panelists were AP business columnist Rachel Beck; Rocky Mountain News finance editor David Milstead, and David Wise, an executive pay consultant with Hay Group. Moderating was Dave Kansas, former editor of the Wall Street Journal’s Money & Investing section who now leads the personal finance Web site filife.com.

SABEW will soon be posting an audio file of the conference, along with the slides, on its Web site at http://www.sabew.org/. Also, I have a copy of the AP proxy tutorial if anyone would like to read it. E-mail me at croush@email.unc.edu, and I will send it to you.

Eight university students from around the country who have shown promise in the field of business journalism were today awarded $4,000 scholarships from the Donald W. Reynolds National Center for Business Journalism.

After being nominated by a faculty member on the basis of achievements, each student wrote a theme and provided published works to indicate proficiency in and an aptitude for business journalism. This is the inaugural year of the scholarships, which are for the 2008-2009 academic year.

“Quality business journalism starts at the university level and through these scholarships we hope to foster ongoing improvement of the field,” said Andrew Leckey, director of the Reynolds Center, located at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. “The nominating professors also deserve credit for going the extra mile to encourage the talent of outstanding students.”

The business journalism scholarship recipients are Jason Borseth of the University of Missouri; Eliot Caroom of City University of New York; Charles Cutter of Indiana University; Amanda Getchel of Ball State University; Wee Sui Lee of New York University; Ashley Macha of Arizona State University; Carlos Macias of Baruch College; and Brigitte Yuille of Florida International University.