The Deal.com Executive Editor Yvette Kantrow criticized the coverage in The Wall Street Journal last Friday of talks between property & casualty insurers Zurich and Minnesota-based St. Paul Travelers, noting that the company took the unusual step of issuing a press release earlier this week to say the story was incorrect.
Kantrow writes, “To be sure, the Journal could rightly say that its story was anything but definitive; it used the word ‘preliminary’ to describe the talks three times. But then the question becomes, why did the paper put such a heavily-hedged story on its vaunted front page? Didn’t that prominent placement trump all of the piece’s hedges and lend it an air of certainty and authority? Would the Journal have ignited the same market and media reaction if it had run the story deeper in the paper, or, in the more speculative ‘Heard on the Street’ column?
“The Journal sought to give its report front-page importance by intoning that the St. Paul-Zurich talks ‘are the latest sign of ferment in insurance,’ which it then discusses for a mere three paragraphs. Clealy, the story’s real raison d’etre appears to be its head-turning merger scoop, which also serves as a convenient trial balloon for any St. Paulies who might be fantasizing about such a deal. (Perhaps St. Paul execs are holding talks about merging with Zurich, but only among themselves.)
“The funny thing, however, is that a story like this one could help spark merger talks just by putting the idea out there. So who knows? Perhaps one day, St. Paul and Zurich will prove the Journal right. But that wouldn’t be scooping the news; that would be causing it.”
Read her column here.
Writing about deals before they are announced is always a tricky situation. The deal could fall through, and the media outlet is left out to dry. Or the companies could deny that they are talking even though they are to gauge opinion about the deal.