The embargo and business journalism

Whether broken by human or technical errors, embargo breaches can have serious consequences. Ron Leuty, a biotech reporter at the San Francisco Business Times, experienced the detrimental consequences of breaking an embargo firsthand.

In September 2009, Leuty was accused of breaking an embargo with Bayer HealthCare. Initially, Bayer sent Leuty an email inviting him to a press conference where the company would make an announcement “regarding the manufacturing for future versions of its hemophilia drug.”

Leuty speculated that Bayer would announce plans to build a plant in Berkeley, Calif. In a blog post on the San Francisco Business Times website, Leuty wrote, “Bayer HealthCare has decided where it will make future versions of its hemophilia drug, but it is not officially disclosing that decision until Wednesday afternoon.”

Following Leuty’s post, Bayer’s PR professionals sent an email to Mary Huss, the publisher of the San Francisco Business Times, retracting their invitation for a different San Francisco Business Times reporter to attend the press conference.

While Leuty maintains he worked independently to get the story, Bayer claims that Leuty violated an embargo.

“Nowhere in that email did it say the word ‘embargo,’” said Leuty.

“You can’t just say something is embargoed. An embargo is an agreement. I wrote the blog post because I wanted everyone to know that we had already covered the topic a month ago.”

Leuty’s incident with Bayer raises questions about the purpose of embargoes and whether they can be used effectively for both journalists and PR people.

Since the advent of the public relations industry with PT Barnum in the 19th century, there has been a complicated and often contentious relationship between PR professionals and business journalists.

The public relations embargo has been a significant point of conflict between these two groups. An embargo is a tool used by PR professionals to give journalists and bloggers major news prior to its official release, with the understanding that they can’t publish stories until a specified date. Typically, no legal or binding contract occurs, so journalists are under no formal obligation to honor the embargo.

Embargoes allow journalists to tell better and more thorough stories. This increases the amount of information that is disseminated to the public. Embargoes thrive in the complicated fields of technology, medicine, government, business and real estate.

When used strategically, embargoes can help build relationships between PR professionals, journalists and the public.

“You build a certain amount of trust with a reporter by releasing protected information, and they build trust with you by holding that information until the appointed time,” said Erica Taylor, a former account director at Ogilvy Public Relations Worldwide.

Usefulness of embargoes

Journalists and PR professionals agree that embargoes can be very useful. Embargoes give journalists extra time to absorb information, research topics and craft their pieces before press time.

“They allow key reporters enough time to ramp up on the topic and key points of the data you’re releasing, and as a result, those reporters can put together a story that can be better understood by audiences,” said Taylor.

Former Atlanta Bureau Chief of Bloomberg News Adam Levy said he respects embargoes and has found them to be particularly useful when dealing with government documents.

Levy specifically recalls relying on embargoes while conducting the Florida recount after George W. Bush was sworn in as the 43rd U.S. president.

“When I was in Florida covering the George W. Bush recount, there were numbers floating around erroneously and the state board of elections issued a 15-minute embargo that helped everyone get their facts straight,” said Levy.

In regards to medical and scientific topics, embargoes can provide journalists time to analyze studies and break down complicated numbers.

“I’m not a scientist by any stretch, so embargoes give me a better understanding of the topics in biotechnology that I’m dealing with,” said Leuty.

Conflicting interests

Conflicting interests and loyalties are at the heart of the issue of public relations embargoes. While PR people enter an embargo protecting a company’s interests, journalists are ultimately responsible to the public.

“If you agree to embargoes too often, I would think you would tend to be perceived by your readers as ‘in bed’ with a company,” said Leuty.

“It makes your readers think ‘what else are they doing in agreement with these companies?’ This threatens your credibility and the credibility of your news organization.”

Journalists such as John Frank, a politics reporter at The News & Observer, maintain that informing the public always remains the number one priority when writing a story.

“If it was some sort of public safety information, the need for the public to know right away would trump any embargo or source relationship,” said Frank.

PR professionals admit that their biased interests sometimes prevent information from reaching the public at the appropriate time.

Napoleon Byars, former director of policy and communications for the Air Force Association, says that the federal government has manipulated embargo policies in order to downplay important information and delay reporting time so news doesn’t become public during the height of the news cycle.

“Some government agencies have been known to release ‘bad news’ on a Friday evening in hopes that it will be smothered somewhat by reporting on other news and events,” said Byars.

PR professionals can also manipulate embargoes to have the opposite effect. They often use embargoes to cause unwarranted media buzz by forcing everyone to report on a story at the same time. This can create the impression that a story is much more newsworthy than it actually is.

In a live chat with Poynter, Jack Shafer, a journalist covering media for Reuters, criticized this misuse of embargoes.

“Practically every embargo is an attempt by a company or institution to control the flow of news,” said Shafer.

“They come up with a lot of self-serving reasons for their embargoes, such as they want everybody writing about the topic to have plenty of time to consider the embargoed material before they write, but what they really want to do is to control the dissemination of their material for maximum impact.”

Jumping the gun

A major issue with embargo policies is that they can be hard to enforce due to the competitive nature of new organizations. As Paul Boutin of The New York Times explained during a panel discussion hosted by global PR firm Waggener Edstrom, “There’s no second chance to write a deeper story, speed counts.”

He compares embargoes to a horse race where there is always an incentive for a news organization to break away early.

An embargo breach causes resentment among news organizations, and journalists may regret participating in an embargo if someone violates an embargo by even one minute.

Michael Arrington, founder and former co-editor of TechCrunch, has declared “Death to the Embargo” because of the prevalence of embargo breaches.

“One annoying thing for us is when an embargo is broken,” said Arrington in a 2008 TechCrunch article.

“A news site goes early with the news, despite the fact that they’ve promised not to. The benefits are clear – sites like Google News and TechMeme prioritize them first as having broken the story. Traffic and links flow in to whoever breaks an embargo first.”

Journalists also feel resentment towards bloggers, who don’t face as serious of consequences for breaking an embargo.

“Rarely will you see organizations like The New York Times or USA Today breaking embargoes, but bloggers present a challenge to keeping embargoes because they have no real motivation for maintaining a relationship with a source,” said Frank.

PR pressure

An advantage of agreeing to an embargo is that journalists get access to important sources. However, embargoes can also limit who a journalist is allowed to contact.

Many journalists have mixed feelings about embargo policies because of these public relations ploys.

“A huge downside to embargoes is that people use them to control your ability to call other sources, such as public officials or other real estate developers,” said Michelle Jarboe, a real estate and development reporter at The Plain Dealer.

“This is an effort to put a reporter in a position of a one-sided story.”

Journalists also find that PR people manipulate embargoes by leaking information and showing favoritism.  Adam Levy recalls a specific infraction involving Home Depot.

“One time Home Depot embargoed information and then leaked the same information to The Wall Street Journal,” said Levy.

“They wanted to manipulate the information at my news organization’s expense. That’s a complete misinterpretation of what embargoes are.”

Many journalists feel that this preferential treatment can ultimately hurt readers who rely on local news.

“There’s a couple of companies that I cover that don’t put any news out there prior to its release, but they should be trying to get local play,” said Leuty.

“I wonder, ‘why not give me the same exclusive that you’re giving to The Wall Street Journal?’”

Another major problem noted by journalists is that PR professionals don’t always understand what an embargo is. Two qualities need to be present in order for an embargo to occur: two parties need to agree and the embargo needs to be used for strategic reasons.

When asked about her negative experiences dealing with embargoes, Jarboe recalled a situation where a PR person sent an embargo about a major land acquisition when the deed was already in public record and the developer had already launched a Facebook page.

“This was so stupid; this big-shot PR person was trying to embargo something when there was clearly public information available,” said Jarboe.

Harsh consequences

Despite such gray areas surrounding embargoes and their rules, journalists generally stray from breaking embargoes because of the severe consequences.

“Breaking an embargo is just like violating ‘off the record’ – it might help you get one great story faster but it will cause problems in the long term,” said Jarboe.

In Leuty’s case, his alleged embargo breach in 2009 caused significant damage to his relationship with Bayer.

“I would say there was a chill in the air for six to 12 months,” said Leuty.

“The relationship has been repaired quite a bit but it took some time. It’s like a marriage – I realized the relationship wasn’t going to get better until I took steps to improve it.”

Public relations professionals feel that these consequences are a fair punishment.

“When a reporter I was dealing with broke an embargo via an online story eight hours early, our remedy was to remove that reporter from the list of reporters that received embargoed information,” said Taylor.

Some journalists argue that PR people are in a more advantageous position to manipulate embargoes because they have more control over the situation.

“I don’t think journalists manipulate embargoes as much as PR people,” said Levy.

“This is your beat. You can’t burn your contacts.”

Trust is key

Despite a lack of agreement about who’s to blame for the problems surrounding embargoes, journalists and PR professionals agree that trust is a key element for any successful embargo. Either close relationships or contracts should be established prior to issuing an embargo.

“I generally agree to embargoes with people that I have long-standing relationships with because there’s a level of trust that I wouldn’t have with someone who just called me,” said Jarboe.

“Embargoes can be valuable if you trust the source and know they’ll have flexibility if something changes because news is a changeable business.”

Michael Crittenden, a reporter for Dow Jones & Co., said he finds embargoes useful when dealing with major economic data and Federal Open Market Committee statements, but agreed that both parties involved in an embargo need to be comfortable with the conditions in order for this tool to work.

 “Embargoes can be useful because they give you time to develop complete, centralized information but they need to be more of a negotiation instead of a blasting out through email,” said Crittenden.

Although each side represents conflicting interests, both journalists and PR professionals can benefit from the effective and strategic use of embargoes. PR professionals can guarantee the publishing of a high-profile story, while journalists can maintain a position of authority on a topic.

“In an ideal world, I would always like to get news in the paper first and there would not be any embargo policies,” said Jarboe.

“However, considering that it’s not an ideal world, embargoes can be useful negotiating tools when I’m obliged to get people to have a conversation with me.”

As for Leuty, he says there’s been a general maturity in the public relations industry since the infamous Bayer incident occurred.

“I’ve seen a real evolution of PR understanding of embargoes – more people call and email me and ask if I’ll agree to an embargo,” said Leuty.

“I still keep the email that was sent to my publisher on my desk as an ongoing educational tool though.”

 Husain is a student at the UNC-Chapel Hill School of Journalism and Mass Communication