Commentary: Business journalism is screwed if CEOs can deny they talked
I fear for the future of business journalism if chief executive officers such as Les Moonves can deny that they talked to reporters when the facts appear to show that they did.
And the business media is to blame for allowing this to happen.
In case you’ve missed what happened, let me quickly recap: Two reporters for Agenda, a Financial Times publication that covers executive compensation and governance issues, dug up some phone numbers for the ousted CEO of CBS Corp., and started calling them. One was answered by a man who identified himself as Moonves, so the reporters interviewed him about the battle of whether he would get his $120 million severance package.
They recorded the conversation, and they also called Moonves back and did a follow-up interview.
The story ran in December, and other media, including the New York Times, picked it up and attributed the Moonves quotes to Agenda.
Now, if you’re a CEO, and you actually didn’t talk to the reporters, and you suddenly saw yourself being quoted all over the place, you’d react immediately and demand a retraction. But Moonves and his PR people waited days before they complained. I surmise they first read some tea leaves and saw that his quotes didn’t go over well.
After taking a look at the situation, the powers that be at the FT/Agenda have now decided to take out the quotes from the story — essentially throwing its reporters under a fast-moving bus. These reporters had no motive to make up quotes, or to doubt that they were talking to Moonves. And the person they interviewed had intimate knowledge of the dealings of CBS. The New York Times reported that Moonves even called FT editor in chief Lionel Barber to complain.
There’s still a chance it wasn’t Moonves. But taking the quotes out without providing readers a clear understanding of what happened — or how the decision was reached to take them out — sets a dangerous precedent, and one that won’t help either business journalism or corporations. Business journalists will now think about enacting safeguards before each CEO interview and may refuse to do any such interviews with executives unless they are in person and recorded.
Personally, I think more business journalism should be done — and could easily be done — without needing to interview corporate executives because of situations like this. Corporations have Moonves to thank for an additional loss of trust from the reporters who want to write stories about their operations.
I find it hard to believe that a business news organization would kowtow to a CEO, even one as powerful as Moonves. I hope that the FT/Agenda was given strong enough evidence to convince them to take out the quotes, but again, we — the readers — don’t know.
But I’m also increasingly troubled by the steps being taken by corporate America and executives to hurt business journalism, which they need to let investors, consumers and potential employees know what’s going on inside their operations. This move by Moonves and his team is just another along a slippery slope.
Washington Post columnist Steven Pearlstine wrote last year that corporations are increasingly declining to comment to business journalists who call them while reporting a story, which can often hurt the quality of the content that is published. In other cases, the companies give “carefully scripted responses that are rarely satisfying, with no opportunity to follow-up,” added Pearlstine. He argued that such strategies have contributed to the decline in trust of companies by consumers.
Some companies also implement strategies to intentionally mislead business journalists or prevent reporters from doing their job. Matthew Herper, previously of Forbes, wrote about how Theranos Inc. Chief Executive Officer Elizabeth Holmes lied to him in an interview about its technology.
Herper wrote, “But she managed, in a rushed interview that left me little time to write, to recast the way I thought about the story, and I wrote about those partners’ confidence that her critics were wrong instead of the many red flags they raised. (One group had done no due diligence on Theranos machines!).”
There’s plenty of other moves by companies to hurt business journalism. Goodyear Tire & Rubber asked an Arizona judge in 2018 to call a reporter for auto news site Jalopnik to not publish documents related to tire failure. The judge declined. Walt Disney Co. prevented Los Angeles Times entertainment reporters from reviewing its holiday movies because it was not happy with the paper’s business news coverage of its business dealings with the city of Anaheim.
Companies also hurt business journalism when they criticize coverage of their obviously-struggling operations. Sears Holdings Corp. Chief Executive Officer Edward Lampert blasted the media at its 2017 annual meeting for “unfairly singling out” the company over the past decade and blamed “irresponsible” coverage for the retailer’s woes, reported Tracy Rucinski of Reuters.
She wrote, “’It’s irresponsible and it’s been irresponsible for too damn long. We’re just looking for a fair chance,’ Lampert said of the media. ‘Excuse my rant but a lot of what we’re doing deserves a chance to see the light of day.’ Five journalists in attendance were not allowed to speak with Lampert or ask questions.”
Companies have also implemented strategies to bypass traditional business media and create newsrooms that disseminate content about their operations or news related to their businesses. Longtime business journalist Aaron Task, formerly with Fortune and Yahoo Finance, joined Experian in June 2017 to add personal finance content to its website.
Broker TD Ameritrade hired Bloomberg Television reporter Oliver Renick in 2017 and launched the TD Ameritrade Network, which is now airing four hours of content about the markets. Margaret Magnarelli, who had been executive editor at Money magazine, was hired as managing editor of Monster.com in 2015 to develop content on its website that would be of interest to people seeking jobs.
Such strategies decrease the reliance by consumers on traditional news outlets, which affect their ability to generate revenue through subscriptions and advertising.
Many companies and company executives are now bypassing the business news media and communicating directly with consumers through social media. Chief executive officers such as Tesla Inc.’s Elon Musk regularly go on Twitter to talk about what’s going on at the company or to reply to what’s been reported about their business. In doing so, these companies and executives put the business news organizations in an unenviable spot of reporting what has already been disclosed in other form of media, giving consumers the perception that they are not needed anymore.
The move by Agenda to take Moonves’ quotes out of their story because he denied talking to the reporters is just another step in giving companies the upper hand in what’s reported and written about them.
Shame on Moonves. But more shame on business journalism.