How the relationship between companies and business journalists has changed

Kate Waldock from Georgetown University and Luigi Zingales at the University of Chicago of the Capitalisn’t podcast spoke to Washington Post business columnist Steven Pearlstein about why business journalism is important to capitalism and how that relationship has changed.

Here is an excerpt:

Kate: Can you give us an example of your favorite company to cover and the types of relationships you established in doing so?

Steve Pearlstein: Lockheed Martin was one I had a very close relationship with. The guy who was the chief flack, as we used to call them—and that was not a negative term—I mean, we had each other on the speed dials. I had his home number. He had my home number. We used to go out and have dinner together a couple of times a year just . . . He never lied to me, and he would never mislead me. If I really wanted something, if I really wanted to talk to the chairman, he’d get me the chairman. They wanted me to be well-informed and knowledgeable. It wasn’t a time . . . It’s not gotcha journalism. We didn’t do a lot of stories about people complaining about chief executives doing sexual harassment. I got to tell you, that was not . . . We were worried about profits, and mergers, and who was winning, and who was losing. The way I like to describe it is that in those days, we covered business the way sports reporters covered sports. There were various teams, and they were competing against each other for the World Series, and we covered it like that.

We covered the stars, that is the executives who, often, big profiles were done of them. They were on the front pages of magazines. When was the last time you saw a business executive on the front page of anything in a laudatory fashion? It just doesn’t happen anymore. The other thing about CEOs, particularly today, is they really like to control. You can’t control the press. You have to get comfortable with the idea that you don’t know how the story’s going to come out. They hate that. These guys, today, are control freaks, and they do not like dealing with the press, in part, because of that. We talk back to them. They’re not used to getting talked back to. They say they are. They say, “Oh, yeah, my people talk back to me all the time.” Let me tell you, that’s a load of crap.

This is another reason they don’t like the press, because we’re not, in their opinion, respectful. By the way, if you want to know where this goes back to, it goes back 20 years, 25 years, to the early ‘90s and the stories we used to write about their compensation. This where the trust, not between the PR people and us, but between the executives and the press broke down, because we kept writing these stories about nobody deserves to earn this amount of money. Of course, back in the ‘90s, they were pikers compared to today. Anyway, that’s where it started.

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