Biz journalists report fluff by choice
by Adam Levy
If political reporters are behind the curve and missing the real story, what about business journalists? Are they, too, remiss in reporting what really is going on at the companies they cover?
This past Sunday, Sasha Issenberg presented a strong argument in The New York Times: political journalists aren’t even good at covering what’s devolved into a horse race — let alone the issues, ideas and basis for what it takes to govern. The Slate columnist quoted Terry Nelson, who served as John McCain’s campaign manager in 2008, on how easy it is for campaigns to obfuscate real issues in an election: “The ability of campaigns to run circles around journalists in some places is strong, and it’s not healthy.” Nor, as Issenberg posits, is it likely to improve.
I started thinking about whether financial journalists were any different. As a financial journalist for two decades, my defense of business-news reporting was swift and steadfast: Sure, political reporters can be duped, but not business journalists. But that sentiment didn’t last long.
Companies are not more naïve than political campaigns. Both corporation and political strategists have mastered the ability to shape their message and reveal only as much information as they need or want to disseminate. My years of reporting on businesses have been counterbalanced by almost seven years of working with companies and executives to help them find their voice, and articulate their message – or at least the message they want to articulate.
The dynamic between journalist and campaign is not fundamentally different than journalist and company. Executives, like candidates, have been prepped. They know how to pivot away from controversial topics and talk about the things they want to talk about. They know what to reveal and what not to talk about.
Reporters might think they know a company and understand its inner machinations. I doubt it. I hazard a guess that most company profiles capture a sliver – say 10-20 percent — of what really happens at a company.
Why so little? Issenberg writes “journalists tend to mistake the part of the campaign that is exposed to their view … for the entirety of the enterprise.” Her point is that the travel, speeches, and TV ads, aren’t the whole story. Same with financial news. It’s fascinating to read about the hedge fund manager who booked his wedding at Versailles, or the company founder who has six homes, a vintage car collection, a vineyard or a hoodie-wearing predilection. Who cares? It may be slightly insightful to read about where a CEO went to school and what sport he excelled in despite his height or speed – telling signs about his competitive drive.
I’m not sure this information will help any reader decide whether to buy or sell a stock or provide insight into whether this executive is equipped to run the company. Instead, it’s just creating the cult of personality around the CEO, not the promised inside look at whether he or she is right to run the company.
Issenberg finished up her article in the Times by stating that we might be spending more time than ever covering elections, but we’re covering the wrong things. “We’re looking at the wrong part of the track and don’t know how many legs are on a thoroughbred.”
That’s what financial journalists need to do: count the legs. In business journalism, it’s all about the numbers. That’s what separates financial journalists from the rest: they have at their disposal a huge array of numbers that can help them shape their coverage, their interviews and provide revealing, nuanced, informed insight into companies.
I’ll forgo the anecdote about a CEO’s wedding or putative boardroom dust-up (the information is bound to be one-sided and lacking the perspective from the other side). Yep, I’ll take a pass on the next lead about how CEO X was a Yale rower or a Michigan shot-putter and the lessons learned from the blisters on his hands.
Instead, give me a cash flow analysis. Show me that a company overpaid for its recent acquisition. Walk me through the thought process of how a hedge fund manager profited from the collapsing Euro.
Political reporters may be doomed to reporting fluff. Financial journalists do so by choice.
Levy is a partner in 30 Point Strategies and a former Loeb Award winner as a business journalist for Bloomberg News