Monthly Archives: January 2006
Mike Ramsey, who represents former Enron Corp. CEO Ken Lay in the current conspiracy and fraud trial by the government against Skilling and Lay over the energy company’s demise, made his opening statement in court today, and he blamed the company’s problems on Wall Street Journal reporters talking to shortsellers, according to Houston Chronicle columnist Loren Steffy’s witty and insightful blog from the trial.
Steffy writes: “Mike Ramsey continues to try to make the Wall Street Journal a culprit in Enron’s collapse. Journal reporters talked to short sellers.
“Short sellers are ‘vultures’ who set out to destroy companies for their own quick profit, Ramsey said. They ‘sponsored’ the Journal stories, he said, which is both insulting and wrong. They were a source. Ken Lay would have been a source, too, except his crack PR team advised against it.
“When the Journal called to asked about the LJM partnerships and Andrew Fastow’s role in running them, Enron’s PR people’s reply, according to Ramsey, was:
“If you call them back, it’s a two-day story. If you don’t call them back, it’s a one-day story.
“Now, there’s some advice that worth it’s weight in Enron stock.”
“As for short sellers, they’re easy demons. Shorts make money when stocks fall. Since markets tend to rise over time, clearly they aren’t popular. And some of them are sleazy. But many of them spend hours digging through company finances — more time, in fact, than many Wall Street analysts did in the days before the global settlement on tainted research.
“To say short sellers destroy companies by planting false stories is like saying executives build companies by planting false press releases. The market is pretty efficient about sorting out bogus claims.”
If I were the Wall Street Journal reporters — Rebecca Smith and Johm Emshwiller — who wrote most of the newspaper’s Enron coverage in the fall of 2001, then I’d be “insulted,” to use Steffy’s word. And to say that my stories were “sponsored” by short sellers shows that Ramsey doesn’t understand the processes involved in reporting when it comes to business journalism.
I hope the jury saw through his attempt to place the blame on journalists for Enron’s problems.
Earlier in the day, Ramsey mentioned Smith by name, saying he would call her to testify that she didn’t listen to a conference call in which Lay disclosed a $1.2 billion cut in shareholder equity.
Steffy’s comment on this: “Well, as someone who’s covered public companies for a good long time and done far more earnings stories than I’d like to remember, let me first say that not listening to a conference call isn’t, to use the defense’s lingo, a crime. Nor does it signify laziness, ignorance or not doing a job. The job often requires you to listen to multiple calls for multiple companies in a single day. Sometimes, you have to make choices. I don’t know what Rebecca Smith did or didn’t do, but I don’t think Kenny Boy is going to beat this rap by trashing the press, revered tactic though it may be.
“Smith wrote her story from the company’s press release, which is supposed to be the official communication of the company’s financial health, at least until its 8-K is filed with the Securities and Exchange Commission. Dropping a bomb like that on a conference call with analysts is selective disclosure.”
Sounds like the business press is in for a rough ride.
Brent Hunsberger, who covers workplace issues at the Oregonion, has been asked by his editors to put together the newspaper’s first examination of executive compensation of public companies in the state. (It’s a long overdue story, he adds.)
But Brent wants some advice on how to do this from other business reporters. What papers do a good job of this, in your opinion? He knows some papers actually hire consultants to analyze executive pay for them. Do you think this is the only way to go, given compensation’s complexity? Have you seen other papers do the analysis using their own staff?
Brent has three basic pieces of information he’d like to know:
1. How does your paper do it: In-house or outsourced?
2. If outsourced, what is the cost?
3. What challenges have you encountered?
I’d also be interested in hearing about how total compensation is determined because I’ve seen it done in so many different ways. Do you include stock options? What about restricted stock? Other compensation such as benefits like country club memberships and car allowances?
My last experience in writing this story was in September 2004, when I wrote the annual North Carolina CEO compensation story for Business North Carolina. The magazine hired the Charlotte office of Findley Davies Inc., a Toledo, Ohio-based human-resources consultant. The study calculated CEO pay using salary, bonus, estimated value of stock options granted, restricted-stock awards, long-term incentive payouts and all other compensation
You can post your answers here on the Talking Biz News blog, or if you don’t want to share that information, you can reply directly to Brent at firstname.lastname@example.org. He promises to keep your newspaper’s information confidential if you don’t want it shared.
Carol Kleiman, who has been writing about workplace issues for the Chicago Tribune since 1967, is retiring. In her farewell column in today’s newspaper, she noted the evolution of her writing and the importance it had in the newspaper.
Kleiman said, “As Working Woman, which started in 1967 in the features section (long before the national magazine with that title was launched), morphed into Women at Work, appearing in the Business section, and then, more recently, became WorkLife, I also wrote two other columns, Jobs and Letters (where I became the Career Coach both in the paper and on CLTV) for the Business section, pouring my commitment to feminism and my passion for equal opportunity and dignity for all workers into them.
“I covered what was happening and also tried to empower people–women, minorities, the disabled, the elderly–who had very little positive exposure in the media. I made sure my columns and photos included a diverse population.”
The New York Times once called Kleiman “the undisputed godmother of workplace reporting.” She is a Peter Lisagor Award recipient for business journalism, and also has also received awards from the Illinois Associated Press and Illinois United Press International. Kleiman has been honored by Glamour and Mirabella magazines, the Coalition of Labor Union Women, Chicago Nurses Association, Metropolitan Chicago Healthcare Council, Mexican-American Business and Professional Women, the Girl Scouts of America and Chicago YWCA. She was the first “Today’s Chicago Woman of the Year,” one of 100 women to be commemorated with a monument in Chicago’s Loop, and was the Midwest Women’s Center 1995 Woman of Achievement.
Along with Jane Bryant Quinn, Kleiman has been one of the female business journalists of the past 40 years who has served as an inspiration to other females wanting to make a mark in the financial reporting world.
Mad Money host Jim Cramer, probably the most ubiquitous person in business journalism these days, is moving his one-hour radio show to CBS Radio from WOR Radio Network, according to this article from Billboard Radio Monitor.
The article states, “Beginning Feb. 14, Jim Cramerâ€™s â€œReal Moneyâ€? will broadcast live from 1 to 2 p.m. ET on eight CBS stations, clearing five of the top 10 markets, including WFNY-FM (formerly WXRK) New York, KNX-AM Los Angeles, WCKG-FM Chicago, KIKK-AM Houston, WKRK-FM Detroit, WHFS-FM Baltimore, KDKA-AM Pittsburgh, and KCMD-AM Portland, Ore.
“As part of the deal, Westwood One will distribute the program to all non-CBS stations.”
This is why I don’t listen to talk radio.
Well-known journalist Sydney Schanberg takes on the issue of real estate mogul Donald Trump and his recent libel lawsuit against New York Times’ reporter Timothy O’Brien for allegedly overstating his net worth in his book called Trump Nation.
As Schanberg notes, Trump is suing O’Brien and his publisher, Warner Books, for $2.5 billion, saying that his business has been affected by that amount. If Forbes magazine is to be believed, then Trump’s net worth of $2.7 billion has taken a serious hit.
Trump’s net worth is the reason for the lawsuit. O’Brien wrote in his book, which was also excerpted in the Times, that Trump’s net worth was in the hundreds of millions, not the billions.
Schanberg notes: “The suit contends that Trump provided O’Brien with all his financial documents and gave the reporter hours to pore over them. O’Brien says the documents he was shown were marginal or useless in determining net worth. He says Trump refused to let him see any pertinent documentsâ€”specifically his tax returns, bank statements, an accounting of his debts, and his casino reports to New Jersey’s Division of Gaming Enforcement.”
Schanberg also wrote: “At the start of his career in hype and carnival barking, the press fawned over him; he made great copy. It’s refreshing that reality has finally crept into the coverage.” He also claims that Trump’s attorney threatened O’Brien at a book signing last month.
Doesn’t Trump realize that all of this publicity is good for O’Brien’s book sales?
Read Schanberg’s piece in the Village Voice here.
According to L.A. Observed, Miriam Pawel applied for an employee buyout and it was accepted. The series on the United Farm Workers ran earlier this year and has been criticized by the union and by others in California, including in an opinion piece on the paper’s editorial page.
The paper fears that her departure will be used by the union to help “spin” their side of the story. Editor Dean Baquet said her decision had “absolutely nothing to do with the UFW series. I thought it was a terrific piece of journalism, and her decision to leave came before publication of the story.”
LA Obserbed writes: “In truth, the seeds of Pawel’s departure were sown after she lost her title as the assistant managing editor for Metro in 2004 and went back to reporting. I mentioned she was likely to leave back in the first post about the UFW stories on January 8. Newsroom speculation is that Pawel hopes to write a book, perhaps on the UFW.”
In a story in the American Journalism Review about the New York Times’ efforts to revamp and revitalize the International Herald Tribune, the reference is made that the IHT is going up against the Wall Street Journal and Financial Times for overseas readers.
In that context, there is a discussion as to whether the Wall Street Journal is cutting back its European operations. The article states: “Prognosticators, including Tribune insiders and Bertrand Pecquerie, director of the World Editors Forum in Paris, predict the overseas Journal will succumb, citing as evidence owner Dow Jones’ decision to convert its Far Eastern Economic Review from a weekly to a monthly in December 2004, its shrinking international operations and its move in October to remake its broadsheet in Europe and Asia into a compact tabloid.
“Though both the Times Co. and Dow Jones refuse to release financial information regarding individual properties, Penelope Abernathy, senior vice president of the Journal’s international division, flatly dismisses the oft-repeated notion that ‘the Wall Street Journal is pulling back and retreating in Europe and Asia. It’s absolutely not true.’ The overseas Journal’s predicted demise is ‘wishful thinking’ on the part of the Herald Tribune, says Abernathy, who formerly worked for 13 years at the Times Co.
“The Journal’s switch to a compact edition in October, one of Dow Jones’ major initiatives in 2005, has succeeded beyond ‘what we could have hoped for,’ she adds. Integrating the print edition with the Journal’s Web site â€“ with its 764,000 paid subscribers â€“ gives the Journal a huge advantage over the Financial Times and the Herald Tribune, says Kate Dobbin, Dow Jones’ director of corporate communications.”
The article also makes this comment about the IHT’s business coverage: “The paper’s business coverage is ‘much better now than it was, but it’s still not as good as the Financial Times or the Economist,’ according to [former IHT staff member Axel] Krause. And, he says, ‘there’s not much investigative or original reporting.’”
Read the entire article here.
There are three predominant market movers, according to this posting by the CEO of Ralston360, a blog from an advertising and design firm:
“There are certain journalists that can move a market.
“Jim Cramer of Mad Money can move a stock 30% overnight by making a strong recommendation as he did last Friday with his recommendation to by NMT Medical.
“Walter Mossberg of The Wall Street Journal can move a tech product like the iPod with a positive review in his weekly column.
“But, I have never seen one person move a market like Robert Parker and the 100 point rating system in his wine newsletter The Wine Advocate. Parker can single handily drive a wineryâ€™s product to double in price and to out-of-stock in days with a glowing review. He can also make or break the sales of the entire Bordeaux wine region with his views on the quality of a single vintage.”
I think there are others in the business journalism profession who can move markets. Alan Abelson of Barron’s leaps to my mind.
The changes that the West Coast paper are making include:
– Providing more information on companies in our back yard, with enhanced listings for the Northwest 50;
– Moving the quick-reference “markets at a glance” information at the top of the main business page instead of at the bottom;
– Listing the ticker symbol of stocks traded on the Nasdaq and New York stock exchanges.
In addition, the paper said, “In an effort to contain our stock listings to a page, we’ve trimmed our mutual funds table to 1,200 of the day’s most heavily traded funds. Although a number of readers turn to Internet sources for real-time stock quotes, we realize that many of you still look to The Spokesman-Review stock pages for information on your investments. So if you’re particularly interested in a mutual fund and don’t see it listed in our table, contact me and I’ll ask to have it added to our list permanently.
“The Nasdaq list is roughly the same as it had been, but we’ve shortened our New York Stock Exchange list somewhat. In both cases, the tables contain stocks with the highest trading volume, so the lists will change daily.”
Read the entire announcement here.
The Fort Lauderdale paper, however, gave no indication that it was cutting its stock listings. The mutual fund listings only appear on Sundays.
Here is what the paper said: “The Sun-Sentinel Business section will change its mutual fund tables starting Sunday. We will list only the largest share class in each fund. Other share classes usually track those returns.
“On Sundays, we’ll add a five-year return to the weekly close, change and year-to-date information. Our mutual fund information the rest of the week will stay the same: on Tuesdays, 1-year return; on Wednesdays, annual yield; on Thursdays, 3-year return; and Fridays, the fund category.”