Wall Street turned on its head

TheDeal executive editor Yvette Kantrow writes Friday that the recent coverage of Eliot Spitzer and Blackstone Group head Stephen Schwarzman has turned business news in The New York Times upside down.

Kantrow wrote, “Nowhere was the confusion more apparent than in The New York Times, which both broke the Spitzer news and was handed the exclusive on Schwarzman’s $100 million donation to The New York Public Library (which was foreshadowed in James B. Stewart‘s New Yorker piece on Schwarzman last month). Both stories adorned the paper’s front page on March 11, of course, but we couldn’t help but notice that the Schwarzman piece was accompanied by another page one story that day: ‘Buyout Industry, Once Booming, Staggers Under Weight of Debt.’ In that piece, we’re told, rather gleefully, that the fortunes of the private equity moguls, ‘with their big paydays and bigger egos’ are ‘plummeting.’ Exhibit A is Schwarzman’s firm, Blackstone Group LP, which announced plunging profits the day before.

“The story was curious on two fronts: First, why was the Times running what basically amounted to a Blackstone earnings piece on its vaunted front page? And second, why was it doing so only two days after a similar story, this one headlined ‘Tight Credit, Tough Times for Buyout Lords,’ ran on the front page of its business section? Did the paper have a death wish for private equity? Or was the Blackstone story, with its talk of big buyout egos and their impending fall, on page one to counterbalance the library donation piece? If that story hadn’t run that day, would the earnings piece have been featured so prominently?

“Of course, Schwarzman could have timed the release of the library news to act as an antidote to Blackstone’s poor earnings announcement. After all, he has shown some media savvy of late, sitting for a lengthy interview with Stewart for what turned out to be a largely positive New Yorker piece and visiting a school in the Bronx, Times reporter in tow, after donating $5 million to the Inner-City Scholarship Fund. Whether that’s enough to erase memories of stone crabs and hapless servants with squeaky shoes remains to be seen.”

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