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Earnings call

Why aren’t journalists allowed to ask questions on earnings calls?


The quarterly earnings call is much more than a casual conversation among a company’s executives, analysts, investors and the media — it’s a carefully scripted dialogue that is practiced well in advance of a call.

The planning and preparation that goes into an earnings call allow little room for journalists to fire questions that may throw an executive off message or make them appear ignorant about a topic in front of a large audience that has the power to push a company’s stock price upward or send it plummeting.

In fact, many publicly traded companies ban business journalists from asking questions during the call at all, and direct them to a specific public relations contact following the call for any follow-up questions. However, oftentimes analysts are permitted to ask questions on the live call.

So, then, why are business journalists prevented from asking executives questions during the call? And why are analysts allowed? Is this a smart tactic?

An Exclusive Club

Prior to 2000, quarterly conference calls were primarily reserved for large investors and analysts, and journalists, along with small investors, were often not even permitted to join in the earnings call. Many companies participated in selective disclosure during these calls, giving some investors an advantage over others.

However, in 2000, the U.S. Securities and Exchange Commission (SEC) mandated through Regulation Fair Disclosure (FD) that publicly traded companies must disclose material information to everyone at the same time. Therefore, publicly traded companies were forced to open their earnings calls to everyone, including journalists.

Even though others are now allowed to dial in and listen to these calls, there is still a sense of exclusivity, and the companies frequently cater to a select group of listeners.

The company earnings calls are held for the benefit of institutional investors and analysts covering the company for investment banks, Sapna Maheshwari, a business reporter at BuzzFeed said in an email on Thursday. The analysts, she said, who ask questions on the calls typically represent this cohort of people, which is why they are provided with greater access.

The Difference

“Analysts often ask a lot of softball questions and offer many congratulations before saying anything on the calls,” Maheshwari said. “They are often scared of losing access.”

Investor relations practitioners anticipate the type of Q&A from analysts, and rehearse the questions with executives in advance. Further, some companies screen analysts in advance for the questions that they may ask through one-on-one emails and phone calls, according to an article from Inside Investor Relations. The investor relations team then often prepares a documented and suggested answers for possible questions that may come up during the Q&A portion of the call.

It’s possible that companies are better able to anticipate the questions analysts may ask, and that they allow them greater access for this reason. This isn’t to say that analysts won’t fire pointed questions; many have on occasion.

Lois Boynton, a professor at UNC-Chapel Hill’s School of Journalism and Mass Communication and former public relations professional, offers additional reasons for why companies provide analysts access to top executives during earnings calls while barring business journalists.

“One argument is that they just don’t want to answer the business journalists’ questions,” Boynton said in an email on Thursday.

“The reputation journalists have for being adversarial probably doesn’t endear them with companies. My guess is that the argument would be couched as their desire to use the limited time they have to talk with those who make decisions [analysts] and who they may feel are better informed.”

Adversarial topics are ones that public relations professionals take painstaking measures to avoid during conference calls that are being closely monitored by those who have the ability to influence the market, and why so much preparation goes into calls. One slip-up could have a significantly negative effect for a company.

Boynton also provided an alternative explanation, and said that companies may also not want journalists asking questions because they don’t want analysts to hear their questions and be influenced by them.

“What is the journalist asks something that could call the company’s reputation into question,” Boynton said. “Would that affect what the analysts do?”

Many companies justify the practice of not allowing journalists to ask questions during the earnings call because they defer them to the public relations department following the conference call, Boynton said.

Working at Bloomberg News last summer, I found this often to be the case. Some companies, Yum! Brands Inc. in particular, were excellent at fielding questions from reporters immediately following an earnings call, while it was nearly impossible to get in touch with others.

“There’s a misconception that is reinforced when the company shuttles the reporter to the PR person – the message is that the public relations person’s role is to keep journalists away from those sources who can answer their questions,” Boynton said. “Although there are PR practitioners who have that role, most see their role as opening doors to the exec level.”

One of the only companies that allow reporters to ask questions during the actual call is News Corp., hosting separate sessions for analysts and journalists to ask question.

“I haven’t run across companies that allow journalists to ask questions on what I cover [retail],” Maheshwari said. “In fact, there is only a handful of companies that are good about putting me in touch with executives.”

Should more companies open up earnings calls to journalists and be more transparent, like News Corp. or is it smart to limit questions to analysts during these sessions?

IR Magazine

What were they thinking? Edition No. 982


Less than a year after the infamous JPMorgan Chase & Co.’s “London Whale”  trading scandal that led to a $6.2 billion loss, IR Magazine gave an award to Jamie Dimon, the company’s chief executive officer, for having the best investor relations by a CEO or chairman in the large market capitalization category.

Though perhaps IR Magazine is giving Dimon the award for the way he handled investor relations following the scandal, in April 2012 Dimon described the would-be sweeping trading scandal as a small event that had been exaggerated out of proportion on JPMorgan’s first-quarter earnings conference call.

In response to a question regarding London Whale Bruno Iksil’s large position in credit-default swaps in corporate bonds, Dimon said on the call:

“It’s a complete tempest in a teapot. Every bank has a major portfolio. In those portfolios you make investments that you  that you think are wise, the offset your exposures. Obviously it’s a big portfolio, we’re a large company, and we try to run it – it’s sophisticated, obviously complex things, but at the end of the day, that’s our job is to invest that portfolio wisely and intelligently over a long period of time to earn income and to offset other exposures we have.”

This misleading statement along with the lack of transparency provided to investors about trading practices raises eyebrows about IR Magazine’s decision to award Dimon the honor of having the best investor relations as a CEO.

IR Magazine’s Methodology

On its website, IR Magazine says that it conducts in-depth research to identify the best corporate investor relations teams. The magazine canvassed opinions through electronic surveys and telephone interviews of more than 800 sell-side analysts, buy-side analysts and portfolio managers across the U.S. to determine the winners.

Other nominees in Dimon’s category “Best IR by a CEO or chairman” included Covidien’s José Almeida, Danaher’s Lawrence Culp and Coca-Cola Co.’s Muhtar Kent.

“But fundamentally good IR is still a matter of building trust with the investment community – which is what all our award winners and nominees – as well as the IR Magazine US Top 100 – have achieved,” said IR Magazine’s CEO and founding editor Janet Dignan on its website.

Lack of Transparency 

In a New York Times Dealbook article last week about the hearing by the Senate’s Permanent Subcommittee on Investigations that summoned Dimon and other current and former JPMorgan officials as it continues to formulate reports, John C. Liu, the New York City comptroller, raised concern on the way Dimon misinformed investors.

“It’s clear from the Senate report and Friday’s hearing that senior executives not only misinformed investors and regulators about the excessive risks the bank was taking, but also withheld this information from their own board. Mr. Dimon’s failure on this score come from the hubris of having too much power placed in his hands.”

Liu has invested in $500 million worth of JPMorgan shares on behalf of public pension funds. Liu is hoping to bolster support for a shareholder proposal that would split JPMorgan’s CEO and chairman roles, The New York Times reported.

Yet on the other side, Joe Evangelisti, a bank spokesman, said:

“Our management always said what they believed to be true at the time. In hindsight, we discovered some of the information they had was wrong…Jamie apologized and took responsibility on live television, multiple analyst calls, and in testimony before Congress and the Senate.”

Additionally, JPMorgan’s board have remained largely in support of its CEO and the bank has had its most profitable year ever and its stock rose more than 20 percent in the last four months.

“And above all the din and arguments concerning risky banking practices is the voice of money — if you’re making it, then you’re fine with how it’s being made,” wrote the International Business Times on Monday.

Yet some in the business media have been critical of Dimon and JPMorgan’s actions. Bloomberg News’ Jonathan Weil wrote an article in January about the omissions in JPMorgan’s report about the London Whale trading losses.

Weil wrote:

“The report also included this bizarre disclaimer: “This report sets out the facts that the task force believes are most relevant to understanding the causes of the losses. It reflects the task force’s view of the facts. Others (including regulators conducting their own investigations) may have a different view of the facts, or may focus on facts not described in this report, and may also draw different conclusions regarding the facts and issues.” In other words, we haven’t been told the whole story.”

What do you think? Did Dimon deserve to receive IR Magazine’s award as ”Best IR by a CEO or chairman” for the way he handled investor relations during and after the London Whale crisis, or does this seem like a suspicious action of the business media cozying up to the CEO of the most powerful banks in the world?


Avoiding errors, and what to do when they happen


The quick pace of social media and the Web have escalated the importance of getting a story right the first time and avoiding errors as a journalist, said Forbes managing editor for business news Dan Bigman in a conference call with Forbes contributors from New York Tuesday.

“Just correcting an error doesn’t necessarily correct the problem,” Bigman said. “If you fix the mistake later, it is already out in the wild and running amuck, with the quick nature of social media.”

Bigman and Forbes editorial counsel Kai Falkenberg outlined some key practices of good journalism to prevent mistakes from being made the first time around. While many of them are obvious, the topic serves as a good reminder on how to maintain credibility as a reporter and uphold the integrity of news organizations.

“There’s a mindset that people have a much higher tolerance for getting things wrong online, but that’s a misnomer,” Bigman said. “You have a real impact, good or bad, and sometimes real people get real lawyers and sue. But it’s more than self preservation.”

Bad Sources

Citing bad sources are one of the most common ways that a journalist will make an error in a story. Linking to or citing someone else is not the same thing as actually getting the story correct, Falkenberg and Bigman said in the presentation.

“If someone else is wrong and you repeat them, you just double down on their error,” Bigman said.

Avoiding incorrect sources can be done by reading multiple sources before rendering judgment, reading an entire story before linking to it and making sure that the source is current and hasn’t been corrected itself.

Bigman told a story of a business journalist who managed to tank a stock by writing about an old news story about the possibility of United Airlines filing for bankruptcy as if it were a breaking news event.

Additionally, some sources may have an agenda, and it is important to see where an organization that issues reports receives its funding.

You Didn’t Get the Other Side of the Story 

Journalists always need to ensure that they are getting the full and accurate version of every story. With sources and PR people having agendas, if a story is underreported, a journalist runs the risk of getting used and publishing an inaccurate story — even if they reported all the facts they received correctly.

Excuses like “but the company told me so” doesn’t serve as a legitimate excuse because at the end of the day, sources only want one thing. Knowing the source and trusting them is important, but a reporter shouldn’t be friends with them, Bigman said.

If a reporter cannot figure out the agenda of someone they are talking to for a story, they should step away or ask directly. Furthermore, Bigman frowns upon letting a source see a story before it is published, including quotes from the source.

“Ask specific questions to clarify a topic as opposed to sending them a chunk of what you’ve written, Bigman said. “If they’ve said something great, controversial, meaty and then you show it to them and they want to retract it, then where does that leave you?”

Not Skeptical Enough 

Dictation is not journalism, Bigman said during the conference call.

“A good source is not someone who is quotable,” Bigman said. “A good source is someone with accurate information.”

Maintaing a certain level of skepticism when speaking to all sources and researching all information is crucial, and keeping this guard will prevent embarrassing mistakes.

Rushing to Publish

General sloppiness when rushing to publish a story before competitors leads to a majority of mistakes that happen on a daily basis among reporters. Most errors are typo or numbers-related, Falkenberg said.

Bigman suggested to “measure twice, cut once” before publishing a story, meaning that a reporter should double check all numbers, read a story backwards, use spell check and get a second set of eyes to read a story.

“You can tank a stock if you get data points wrong while writing quickly,” Bigman said. “Be careful when writing about earnings of a big company, as it’s usually billions not millions.”

Writing Outside Your Area of Expertise 

When a journalist is assigned to a certain beat, they become an expert in that topic, of the people who matter in the industry and of the companies they cover. When a journalist strays outside his or her area of expertise to report a story, errors may often occur this way.

“Don’t get in the mindset of, ‘Well, this topic was getting traffic so I had to say something,’” Bigman said. “Write about what you know and don’t try to be smarter than you are.”

You Made a Mistake, Now What? 

Every news organization has its own way of handling factual and typographical errors, but Bigman and Falkenberg outlined some practices that are fairly standard across professional agencies.

For smaller typos, whether spelling or data points, the correction should be made in the body of the story, with an acknowledgement of the correction at the top or bottom of the story.

“In the correction, you just want to move forward and say what’s right,” Bigman said. “Just say that something was misstated in the previous story, don’t repeat the error.”

Falkenberg highlighted the importance of due diligence before making a correction so that the reporter doesn’t have to issue a more than one correction by getting it wrong a second time.

For more major errors, its imperative to contact an editor immediately and discuss with someone in higher authority about how to treat the error.

“We (Forbes) very rarely take down posts, and the act of taking down posts generates a lot of coverage itself and often gets magnified,” Falkenberg said. “It’s very hard to undo an error once it’s there.”




Stock market coverage: Are the continuous updates too much?


There’s the initial story, with two to four paragraphs. Then there’s the first update that adds more context, the second update and closing the story once the stock market has shut down for the day.

The standard for stock market coverage, in the age of media saturation, is to continually publish updates with the most recent numbers and information. And business networks cover stock market fluctuations in a more frenzied manner.

Updating a story three or more times in one day and getting maybe only 20 views on a single update or having only a few people care about the stock that is flashing across a business network begs the question from some of whether covering the stock market in this manner is overkill, as people who care about a single stock or the Dow Jones Industrial Average are a minority of Americans.

I have days, particularly when I’m in the middle of writing a seemingly unimportant update that might take away the time I would be using to write a longer story, where I believe that these stock market updates are too much and that no one cares about my story update aside from my editor.

But, just as technology has enhanced the ability to deliver news in a timely manner, it has also made stock market trades that much faster and easier. A trader on Wall Street can buy and sell stocks almost instantaneously. It’s fascinating to track how much a stock price can change in just a few seconds in reaction to some piece of company news or even just speculation about a company.

Because of technological advances in both the stock market and in the media, it has made it imperative to deliver continuous updates and news about a company and its stock price. It’s true that the majority of Americans don’t care about the stock price of Performance Technologies or some other company, but the reason that business journalists, publications and networks exist is specifically for the people who do and who are highly invested in the most minute change in a stock price.

Wall Street traders and other investors can lose or gain millions of dollars in a series of quick trades, and they frequently depend upon business news agencies and television networks to provide them timely, accurate news to provide them they need to decide whether or not to buy and sell stocks.

Several months ago I spoke to a business journalist who had inaccurately published a headline about the stock price of a company and was contacted later by a gentleman who had made a trade based on the incorrect information — and lost thousands of dollars because of it. Scenarios such as this one remind me in the moments that I think my story update is pointless that at least one person is depending upon the information I am delivering to be completely up to date.

Bloomberg has developed news delivery systems such as First Word and Headlines to publish the most important nuggets of information in the quickest manner possible. Other news organizations do the same. This type of delivery system, just as the banners scrolling across the bottom of business networks, makes the most sense to me. Even though a few people will click on the story, busy bankers and traders only have time to consume the most relevant parts of the article for their job and don’t read through the rest.

The only type of stipulation that I have to believing in the importance of continuous stock market coverage is whether the constant coverage fuels the stock market frenzy of trading or whether this would happen without the information delivery system of business news outlets.

My inclination is that, even if CNBC didn’t have someone on the trading floor covering stock fluctuations as if they were a sports commentator, the trading would still happen in this manner, and that ultimately the business journalist is there to serve the consumer of the news.


How to cover sinking retailers


No company enjoys admitting that it is having financial troubles or is in danger of shutting its doors, and typically does everything in its power to spin a positive outlook to the media and consumers.

This desire to maintain a successful image makes it even trickier for a reporter to cover foundering companies.

In my weekend reading, I came across an article from The Wall Street Journal, “For Four Retailers, Do or Die.” The article highlighted Best Buy Co., J.C. Penney Co., RadioShack Corp. and Sears Holdings Corp. as four retailers who, going into 2013, have 12 critical months ahead of them to either turn around or fail.

In addition to these four companies that have gotten the brunt of tough coverage from analysts and retail reporters in the past year as they’ve faced financial woes, smaller chains such as Abercrombie & Fitch Co., Pacific Sunwear of California Inc. and Barnes & Noble Inc. have also experienced trouble.

As roundups of the year are published and commentators are predicting which companies will may disappear in 2013, such as this one by 24/7 Wall St., I’m left wondering how business journalists should best approach stories about struggling retailers and also how they should handle the relationship with those companies. 

What is the best way to approach the public relations team and company executives for commentary and honest answers when both parties know that the article most likely won’t make the company involved look good?

I’ve looked at some stories that have been published during the past year to see how news outlets have covered these retailers and how journalists have worked with the company to quote it in the story.

From most of the stories that I read, the best stories that covered difficult subjects removed any opinion about a company and inserted indisputable facts and figures first, before quoting analysts or investors, who obviously influence the tone of a story. Many of the stories cited sales figures, comparing them to previous years and to competitors, or took a look at market share.

The reporters would also look at retail trends in recent years and illustrate whether retailers had kept pace or stayed ahead of trends or had fallen behind and started too late.

The most reliable of the stories also made mentions of attempting to talk to a company, or, at best, quoted executives at the company or public relations officials with whom the reporters had had personal conversations.

Bloomberg published a story in October about Abercrombie’s declining sales and bizarre requests by its Chief Executive Officer Michael Jeffries during corporate jet flights. The only comment from the company present in the article is an e-mailed statement provided by the company that said the board supported Jeffries’s strategy for the company.

An excerpt:

“In an e-mailed statement provided by the company, lead independent director Craig Stapleton said the board supports  Jeffries’s strategy. The company doesn’t comment on rumors and speculation, General Counsel Rocky Robins said in the same e- mail.”

This type of general e-mailed statement provides no information, and refusals by a company to comment at all seems far too common in company coverage stories. Those kind of statements aren’t beneficial to the company and its public relations team, to the reporter or to the consumers of news.

A lack of comment doesn’t allow the company to share its side of the story and only makes it look guilty or having no good answer or rebuttal to the questions a reporter is asking. A simple statement, such as the e-mailed one in the Abercrombie story, is better than no commentary, but not by much.

If companies are offered a voice in a story about them — and they should be if a story is fair an accurate — then they should take it.

The best type of comment, of course, is one that provides both accurate information and insight into a company’s situation from either a PR person for the company or from an executive. This is more rare, and sometimes when this does happen, the person will ask for anonymity in a story.

In the past, I’ve covered a company whose public relations team called me with some negative information about the company and provided me with supporting quotes, but would not let me give the names of my sources in the story. No matter how much I asked, they refused to budge.

In this case, unfortunately, the PR team seems to have the upper hand, as the reporter wants to scoop the information and can typically get permissions from editors to publish the story. In August, The Journal wrote a story about Best Buy’s turnaround plan, quoting “people familiar with the matter,” which is one of the most common ways to quote an anonymous source.

Other popular ways that I’ve seen reporters quote a company in a story that has negative undertones is typically to pull quotes from a conference call, such as this story about J.C. Penney’s marketing strategy by The Journal in June.

A significant number of business stories quote conference calls, which I don’t believe is the best way to get the voice of a company into a story. This shortcut can be beneficial when a reporter is pressed for time and needs to get a story out quickly or has repeatedly tried to get a company to comment to no avail.

Using a conference call or investor conference quote as a replacement to interacting personally with public relations seems lazy and takes away the possibility of developing a relationship with the company and receiving newsbreaking information in the future. 

While calling to ask probing or negative questions about a company isn’t always the easiest, it provides the opportunity to receive the most accurate and original answers, which can lead to the best story.


Twitter’s Luckie talks strategy for journalists


As a way to develop better social media engagement strategies, journalists should treat Twitter and other outlets as an extension of their interaction with people in their personal life rather than as a separate entity, said Mark Luckie, manager of journalism and news at Twitter in a conference call with Forbes writers from New York this week.

Luckie outlined ways for a journalist to optimize Twitter, and stressed the importance of having a personal voice as well as a professional one. In this way, a journalist is able to create an identity that people want to interact with and follow.

“People connect with people, not robots,” Luckie said. “You will get more eyeballs on your content if you share with people things about yourself. As a general rule, tweet 50 percent about your beat and 50 percent about things that just interest you.”

Journalist also need to determine who their main audience is and devise the way to best reach them and add authority to their tweets so that the audience will follow back.

Extension of Everyday Interactions

The first tip that Luckie provided Forbes’ writers was not to be “an egg,” which is a pictureless account on Twitter that is often associated with robots and spammers. Before following anyone on Twitter, Luckie said that completing a Twitter biography and providing a photograph provides legitimacy to accounts, stating where you work and what differentiates you from other users.

“Having a voice is different from having an opinion,” Luckie said. “Do you have a quirky personality? Are you authoritative? Happy? Communicate that voice through Twitter.”

Luckie told a story about a reporter from BBC reach out to a potential source on Twitter but had not completed her profile yet, and because of not having a completed identity, the source didn’t believe in her legitimacy as someone from the news network.

After creating your identity, immerse yourself in the conversation of Twitter by not just listening, but participating in the conversations and creating new conversations. By creating this dialogue, a journalist is best able to source, attract followers to his or her content and generate buzz of his or her own.

Raising your journalistic profile

“Think about what you want to do in your reporting and how Twitter can be the vehicle for this,” Luckie said during the conference call. “If you’re asking questions on Twitter, respond back to people as well so they know that you’re listening to them.”

It’s important to engage people in your tweets by including the Twitter handle of sources you’ve talked to or crediting an organization that you received information from for your story. This helps both to increase follower growth and boost engagement. Furthermore, people like being mentioned on Twitter and interaction is the key to gathering a following.

Below is an example:

Using hashtags in a post can increase engagement by almost two times for journalists and one-and-a-half times for news organizations. For business journalists, in particular, a good strategy to reach the investors, analysts and their core audience is to use a cashtag, which for Apple would be $AAPL.

Social media is becoming increasingly visual, Luckie said, and tweets that have media attached receive three to four times more engagement than posts without visual aids.

Luckie said that news organizations and journalists are currently underutilizing the power of visualization and noted that infographics do exceptionally well on Twitter as opposed to something like a long-form story. Many Twitter users don’t have the time to sit down to read an entire story, so communication through media works well and attracts followers.

Additionally, acting as a crowdsource for your followers can work well, Luckie said.

“I may not follow every political journalist, but if I follow one who retweets other political journalists a lot, then she acts as a news curator for me.”

Researching Topics through Twitter

Journalists should also use Twitter as a way to research stories in addition to attracting followers to their content.

Creating lists and searching for lists that other people have made can make it easier for journalists both to find people on Twitter and organize the people they follow into groups. For example, if a journalist is working on a story and he or she wants to organize all potential sources into one play, then a private list can be made specifically for that project, meaning that no one aside from the journalist will be able to see it.

Additionally, using Twitter search and the advanced filters can help a journalist narrow down to specifically what he or she is searching for, and provide information on what others are saying about a topic.

Advanced search, for example, can allow a journalist to see images that are being tweeted from specifically one zip code, which, for example, could have been informative to follow the election visually in different cities across the U.S.

Finally, Luckie helped illustrate the key differences for the uses of Facebook and Twitter. He acknowledged that longer form pieces are better left to Facebook, while Twitter is best for breaking news or quick tidbits.

“Facebook is for people you know and Twitter is for the people who you want to know.”


News aggregation: Both friend and foe


News aggregation is both the best thing and the worst thing about the Internet, said Forbes leadership editor Fred Allen in a conference call Wednesday that focused on how best to leverage the powerful tool that’s become popular in the wake of social media and blogging.

“There are a lot of ways to aggregate and repackage that add value, but there are other ways that amount to not much more than stealing a post,” Allen said.

The key to creating a merit-worthy story that contains news aggregation is to somehow add value, whether that be passing along a great article to readers, providing a valuable roundup or stating an opinion,  backing it up with what others have previously written.

Even with this value-added approach in mind, the lines can still be blurred between providing good aggregation versus bad aggregation, and Allen broke down the distinct differences between the two radically different kinds of articles.

Give Credit Where Credit is Due

When aggregating news for a story, a reporter must always keep in mind that published works often are copyrighted, and that he or she needs to adhere to fair use guidelines to avoid legal action and be tactful in providing proper credit to the original author, said Kai Falkenberg, a legal counsel at Forbes, during the conference call.

Some keys of appropriate aggregation are firstly to clearly identify and link to your sources. Allen suggests linking both at the beginning and end of a story to provide readers an ample opportunity to click on and go to the original story.

Quotes should also be brief and clear, typically using no more than one paragraph of direct text from a news story. Quoting more than is needed can lead to the issue of the aggregated article becoming a substitute for the original work.

Crossing the Line

Examples of bad aggregation include aggregating simply to steal traffic, being less than explicit that the story is aggregating and concealing links.

In 2011, Huffington Post reporter Amy Lee over-aggregated AdAge’s story about former  Rep. Anthony Weiner (D-N.Y.) and Steve Jobs and Apple going head to head on social media networks, both making headlines the same day.

The story, Allen said, not only concealed the link to the story, but aggregated the story so much that it essentially plagiarized and replaced the original story. The Huffington Post reporter, Lee, was suspended briefly but resumed her post more than a month later.

When Aggregation is the Friend

Though aggregation can be a way to run into trouble, if it is done right and adds value, it can be a great way to get traffic without a significant amount of time and work, Allen said.

One excellent way to leverage aggregation as a beneficial tool is to use previously written articles to back up an opinion or fresh idea that a reporter wants to post.

For example, in early November following the election, Allen wrote a story titled “Romney the Great Manager? Not Nearly as Good as Obama, the Election Proved.”

“I didn’t want to depend on my own voice, so I used the voice of experts to help me make the point that I wanted to make,” Allen said during the conference call.

This value-added approach, while consciously ensuring that proper credit is being given to the original news source and that the new story doesn’t act simply as a replacement, make for the best utilization of the powerful tool of aggregation.

“I don’t think there is too much aggregation,” Allen said. “There is just doing it in the right and wrong way. As long as there is a desire for the topic and you are adding value, it’s OK.”

Bill Berkley

The public relations roadblock to accessing company execs


The love/hate relationship between business journalists and a company’s public relations team is a well documented one.

To heighten this already contentious relationship, companies frequently use their public relations staff as a roadblock to keep business journalists from calling C-suite executives.

Why do companies, particularly publicly traded companies often do this? And is it the best strategy?

One of the most important tasks of a PR professional is to stay on and promote their company’s carefully crafted message and provide positive spin on any news that comes about about the company.

Since this is a key part of their job, PR professionals are accustomed to handling relationships with journalists, carefully preparing in advance for any question that a journalist may fire.

While CEOs are trained to handle questions from reporters to some extent as well, they most likely aren’t as prepared to field questions from reporters on a daily basis and stay perfectly on company message.

Because of this and the other plethora of duties that company executives have, it makes some sense that business journalists are often deferred to the public relations department, rather than being able to directly call executives. This often comes to the frustration of business journalists who would much rather a quote from someone inside of the company rather than spin from either an external PR firm or the internal PR department.

Is it in the company’s best interest? 

Whether it is a wise choice for a company to have its PR department field questions from journalists that may be better answered by the CEO is an interesting question. While certain companies have precedents on whether their CEOs will take direct calls from business journalists, to some extent this tone can be set by the chief executive.

If the CEO is amiable toward the media and is media savvy, I don’t think it is wise of a company to prevent journalists from speaking to the executives. In fact, it can even be to the company’s detriment, as the CEO may have the best perspective on a company’s goals and outlook.

Further, a story that contains a quote from a CEO will often get better play in a newspaper or on a website than a story that simply quotes a prepared message from a press release or PR person.

Talking to executives also allows journalists to cultivate a personal relationship with the company, which can help provide fair and accurate coverage — even if this coverage is not always favorable. Giving the CEO a chance to comment in a story that may be negative but fair may appear better to the public than a story where the CEO refuses to comment at all.

Bill Berkley, who has been the CEO of insurance firm W.R. Berkley Corp. since the company’s formation in 1967, is know for providing his blunt and honest opinions to reporters.

Warren Buffett, the CEO of Berkshire Hathaway, has also been known to speak freely with reporters and to utilize media relationships wisely. Buffett even writes his own shareholder newsletter, which is uncommon for CEOs of large companies. He also pens opinion pieces that are published by major news outlets, seeming to understand the importance of a comprehensive communications strategy.

Media savvy CEOs

An executive that doesn’t shy away from the media but instead knows how to leverage news coverage and when to take calls directly from business journalists can have the most success in obtaining the most fair coverage. This is because a reporter is able to obtain the truth from all sides and insert comments from the most important players in a story.

Additionally, as Dan Simon, a Forbes contributor, wrote in his blog earlier in October, “Senior executives who believe in the power of PR often see the greatest results and those who don’t almost always end up with the less positive outcome they predicted from the start.”

Simon goes on to point out that CEOs who believe in the power of public relations often see better results in the media not because of “the power of faith” but because these are the executives who take actions to help boost the company’s public relations.

Executives who understand and believe in maintaining a relationship with the public and with the media will seek out opportunities to enter conversations about their industry, whether that be speaking at conferences, taking a reporter’s call or blogging and writing opinion pieces.

“Naturally this results in better conversion rates of interviews to coverage and better relationships with key influencers,” Simon wrote.

Thus, the company that will be most successful in promoting its message and maintaining a positive relationship with business journalists will be the ones whose top executives will happily take the calls of journalists, rather than creating a PR roadblock for them.

Private equity

Private equity stories proliferate as the election approaches


Presidential candidate Mitt Romney’s famed background as a successful businessman has given a multitude of  journalists, particularly business journalists, a topic of renewed interest to cover this election season that is usually left to the few — the  private equity beat.

Romney’s past as a consultant and then co-founder of Bain Capital LLC, one of the largest private equity firms with assets of $65 billion, has brought private equity from out of the shadows and into the harsh limelight.

This isn’t to say that stories about private equity firms didn’t exist before, they did. In fact, the major business news outlets, such as Bloomberg and The Wall Street Journal, have reporters dedicated to solely covering private equity.

Some private equity companies are even publicly traded, such as The Blackstone Group LP and KKR & Co. LP. And the firms are always mentioned if they are involved in high profile deals taking a public company private, such as the announcement today that would be bought by European private equity firm for $1.6 billion.

What is often a niche beat, however, has become something of mainstream interest thanks to election coverage. Political ads accuse Romney of laying off thousands of American workers while with Bain Capital.

With this public interest focused in on private equity, stories about elusive private equity firms have proliferated leading up to election day on Nov. 6.

Particularly, stories that relate to Bain Capital have skyrocketed.

This increased attention on private equity has made me question whether this attention on the firms, particularly Bain, is deserved or whether the business media is capitalizing on political talking points to draw in readers.

Subpoenaing more than a dozen firms

I first began noticing the trend toward stories with a private equity theme early in September when New York attorney general Eric Schneiderman subpoenaed more than a dozen private equity firms to see whether they were abusing a tax strategy in order to cut hundreds of millions of dollars from their taxes.

The media’s coverage of this story is defensible, as multiple firms were subpoenaed and the investigation has implications for New York state, the private equity firms and for the election.

Yet, I can’t help but wonder if this story would have received far less coverage if Bain Capital had not been one of the company’s subpoenaed and if the journalists had not been able to tie the story back to the election.

The New York Times wrote:

“Mr. Schneiderman’s investigation will intensify scrutiny of an industry already bruised by the campaign season, as President Obama and the Democrats have sought to depict Mr. Romney through his long career in private equity as a businessman who dismantled companies and laid off workers while amassing a personal fortune estimated at $250 million.”

The connection between the election and this investigation that all major media outlets sought to make is obvious.

A Bunch of Malarkey

More recently, the private equity firms have come under allegations that the biggest buyout firms colluded in bidding on takeovers, and the media has been covering the story voraciously.

“The lawsuit is a complete fabrication and a bunch of malarkey,” Tony James, president of Blackstone, said in response to a question from Bloomberg News on a conference call.

“It’s a long, long way from what’s being alleged by these latest attorneys, and I suspect there’s some political motivation lurking in here because we have a private-equity guy running for president.”

This statement particularly struck me. Though when I see many private equity stories right now, I catch myself saying, “Would this story exist if it weren’t election season,” James’ statement also reminded me that I also need to ask myself if the subject matter would exist for journalists to report on if it weren’t for the election.

Thrust Into the Spotlight 

Reuters reported yesterday a story about American Petroleum Tankers LLC, which is controlled by private equity firm Blackstone. The story was about the company’s desire to order two new tankers if approved for a $340 million loan that was originally rejected by the Maritime Administration.

In July, APT sued alleging that the government’s stance was based “primarily on the fact that APT is owned by investment funds managed by private equity firms.”

Directly in the story, the reporter writes, “But the lawsuit comes at a time in which the industry has been thrust into the political spotlight as Republican presidential hopeful Mitt Romney defends his record as chief of Bain Capital LLC from attacks by President Barack Obama’s campaign.”

No matter the private equity story, ties to the election seem ubiquitous.

Romney has additionally come under fire for Bain’s decision to outsource the jobs at Sensata Technologies Inc.

And then there is this story that ties Romney, Bain and the voting machines in Ohio and Colorado.

The election is proving that private equity is everywhere, but will the stories be here to stay come Nov. 7?


Leveraging social media as a business journalist


The public nature of Twitter lends to a two-way conversation that allows reporters to source stories and connect with their audience, said Forbes Media LLC science and medicine reporter Mathew Herper in a conference call for contributing blog writers Thursday.

“It’s like a cocktail party in a bar where everyone is shouting,” Herper said in the conference call from New York. “Twitter is a great way to meet colleagues, competitors and sources.”

The ability to have a public conversation on Twitter also helps to draw in an audience interested in a reporter’s beat and allows a journalist to raise his or her profile by tweeting links to articles.

Herper, however, warned that the main point of Twitter is for engaging in conversation and sourcing, and that it doesn’t generate as much traffic to stories as other social media platforms, such as Facebook. While journalists should talk to people they want to get to know, they also shouldn’t dominate the conversation or ask for retweets and follows.


“You can find industry groups on Twitter and have really technical conversations in short format,” Herper said. “Anyone can follow and join in. It has a ‘free-for-all’ brawl feeling that you can’t get through any other medium.”

Herper said that he has written entire articles where he did almost all of his sourcing on Twitter.

“I’ve quoted from tweets directly, and without asking,” Herper said. “But only from sources that I know.”

When asked about potentially exposing sources through Twitter conversations, Herper said that most of is sources are not a secret, and that if he planned to talk to a source off the record, he would never do this via social media. Most often said that these sorts of conversations happen via phone, he said.

Twitter is “more public than a public square,” Herper reminded the contributing writers during the call.

“Tweets are public unless someone has them locked,” Herper said. “And even then, I would assume that they are public because people can easily retweet them.”

Journalists also should remember that because tweets are 140 characters or less, they can more easily cross the line into being misunderstood, and minor disagreements can appear to be major fights.

To avoid getting into these kinds of situations, Herper advised Forbes contributors to stay on subject, and to know that subject well.

Raising your journalistic profile via Twitter

While Twitter can be used to share links of stories that journalists have written themselves, this often isn’t the best way to engage an audience on Twitter and attract a following, Herper said.

“Twitter doesn’t share a story well for days. That’s not what it’s for,” Herper said.

Because tweeting links doesn’t generate as much traffic as other social media, the best way to use it is for topical conversations and engaging with followers on a personal basis.

Herper recommended finding groups of people that interest you and begin conversations by following them. Engaging with and meeting new sources in this way help to drive new story ideas.

“You can maximize traffic from Twitter by being in the conversation with people who are interested in your stuff,” Herper said.

Retweeting stories that are interesting to a journalists but not necessarily their own can help to increase their following.

“I don’t think worrying about what time you should tweet or tweeting about trending topics is a good way to use twitter. It’s  okay to tweet at a time when people don’t tend to be listening as much, and then again in the morning,” Herper said. “If you repeat yourself a little, people don’t tend to mind as much on Twitter.”

And if all else fails?

“Get Justin Bieber to retweet your story. That’s the most clicks on a story I’ve ever gotten from Twitter.”