Business journalism, circa 1955

Yvette Kantrow, the executive editor of The Deal, writes Thursday about what it’s like to pick up a copy of Fortune magazine from 1955 and see how business journalism can still be excellent in telling a good story — and still, unfortunately, bury a lead.

Kantrow writes, “But nestled among the cheeky clairvoyance is a story devoted to a subject near and dear to our hearts: dealmaking. In a piece headlined ‘The Chain Reaction in Hotels,’ Fortune reporter Robert Sheehan explored what was behind ‘all the action in the hotel market,’ which had seen $250 million in deals in the previous two years and had just witnessed ‘the largest real-estate transaction in history,’ the $111 million sale of the Statler chain to Hilton. It’s a rambling, leisurely read — what we would now refer to as long-form journalism — filled with the kind of detail that today’s financial media often pays lip service to but rarely delivers.

“Sheehan starts out by warning his reader that hotel dealmaking is not something the ‘average businessman, and the average investor’ can easily understand. ‘For the economics of the hotel industry are peculiar and the layman can never be quite sure what the professionals are up to in any given hotel transaction.’ But Sheehan is undeterred. In a tone suggestive of two intelligent friends chatting over a glass of wine, the story goes through all the reasons why ‘Connie Hilton’s’ deal for Statler — he paid $50 a share in cash for a company that was trading at $28 when the bidding began — ‘was anything but a steal.’ As Sheehan put it, ‘[I]n the factors most vital to growth and earnings — occupancy ratio and return on investment — the hotel business would seem to be getting worse instead of better.’

“Soon, we’re deep into a surprisingly engrossing discussion of occupancy rates, business versus casual travelers and hotel chains versus independents. But we’re still left wondering why Hilton agreed to pay so much for Statler. Finally, Sheehan discloses ‘the real nub of the situation’: hotel chains’ ‘new standing with the moneylenders’ and, more importantly, their ‘ability to size up and exploit advantageous tax situations.'”