Tag Archives: Company coverage
by Chris Roush
Thomson Reuters Inc. plans to review of the company’s business units, in the latest sign the data provider is looking for ways to respond to weak demand from its financial services clients, report William Launder and Keach Hagey of The Wall Street Journal.
Launder and Hagey write, “More details are expected Wednesday, when Stephen Adler, president and editor in chief at Reuters, will address the company’s news staff in a conference call, two people familiar with the matter said. The call has been billed as an ‘editorial update’ where staff can ask questions.
“Thomson Reuters’s financial and risk division has suffered in recent years as big bank clients reduced head count and amid struggles in various European economies. The company’s Eikon financial desktop platform, launched in the wake of the financial crisis, has only recently shown signs of growth. Thomson Reuters had a total of around 61,000 Eikon desktops installed as of the end of the second quarter, up approximately 30% from a year earlier.
“Elsewhere within the company, Thomson Reuters told staff last week that it had abandoned a plan launched more than two years ago to improve its consumer-oriented news website, a project known as Reuters Next. The company cited missed deadlines and budget targets as reasons the project was canceled.”
Read more here.
Last week the Columbia Journalism Review published a brief story about how various industry publications wrote notably different news pieces based on one press release.
The stories centered around a lawsuit between the Motion Picture Association of America (MPAA) and Hotfile, which is described in the piece as “a cyberlocker service that lets users upload files and creates a link for each one.”
Because the ruling in the case was not immediately available through normal public channels, news media were forced to report on the story with virtually no direct sourcing on the result of the trial. Here is where MPAA made the savvy move to issue a press release pronouncing the ruling was a victory for the industry. Ignoring the resulting bias from technology media, with a natural inclination to support Hotfile, and entertainment reporters, with a similar bent toward the MPAA, the predominant storyline was that the ruling was a clear victory for MPAA.
Issuing the release was a savvy move from the MPAA, not simply for being the only direct commentary on the case but because in litigation often the first word is the most important. Most legal documents, especially judgments, are long and complicated.
Most of all, rarely do rulings offer clear, definitive language that supports the notion of a resounding victory for one side over the other. That is not to say it does not ever happen, though. It is rare because the court must weigh the arguments of both sides, meaning that competent attorneys will make strong points for their clients.
As a result, subsequent media reports of a ruling often rely on how one side or the other is reading the ruling.
If the law supports one argument over the other, the tone and length of the victorious party will help reporters contextualize exactly what it means for the company and maybe the industry. In these situations it is important to stay in line with the organization’s broader legal strategy. If an appeal is likely, the victorious company will need to be confident and excited about the ruling, but careful not to go too far in their language. It is always important to remember that judges, regulators and the opposition read these statements carefully.
In the case of Hotfile, while a statement may not have been entirely appropriate given that ruling was not favorable, ignoring the media only served to do further harm to the company’s public image. In order to bring the tone of the coverage back toward a more middle ground, the company might have considered a single interview where the executive was able to emphasize that the ruling was not as clear cut as MPAA made it out to be.
Another tactic, if allowed by the attorneys, would be to arrange for reporters to speak with legal counsel on background to provide more context to the ruling and highlight key points that refute claims in MPAA’s release.
Losing a verdict at trial does not have to mean a total loss in the court of public opinion.
by Chris Roush
David Faber has now spent 20 years as co-anchor of CNBC‘s “Squawk on the Street.” He is also an anchor and co-producer of CNBC’s acclaimed original documentaries and long-form programming.
During the day, Faber breaks news and provides in-depth analysis on a range of business topics during the “Faber Report.” In his 20 years with CNBC, Faber has broken many big financial stories including the massive fraud at WorldCom, the bailout of the hedge fund Long Term Capital Management and Rupert Murdoch’s unsolicited bid for Dow Jones.
On Friday, CNBC ran a montage of his most famous stories from “Squawk.”
by Liz Hester
Wal-Mart is cutting inventory according to a story by Bloomberg, sending the company’s stock price down. But are they? Wal-Mart denied the story, making it hard to decipher the truth.
Here’s the beginning of the Bloomberg piece that started all the uproar:
Wal-Mart Stores Inc. (WMT) is cutting orders it places with suppliers this quarter and next to address rising inventory the company flagged in last month’s earnings report.
Last week, an ordering manager at the company’s Bentonville, Arkansas, headquarters described the pullback in an e-mail to a supplier, who said others got similar messages. “We are looking at reducing inventory for Q3 and Q4,” said the Sept. 17 e-mail, which was reviewed by Bloomberg News.
U.S. inventory growth at Wal-Mart outstripped sales gains in the second quarter at a faster rate than at the retailer’s biggest rivals. Merchandise has been piling up because consumers have been spending less freely than Wal-Mart projected, and the company has forfeited some sales because it doesn’t have enough workers in stores to keep shelves adequately stocked.
“We are managing our inventory appropriately,” David Tovar, a Wal-Mart spokesman, said today in a telephone interview. “We feel good about our inventory position.”
The order pullback isn’t “across the board” and is happening “category by category,” he said in a previous interview.
“In some cases, we’re going to be taking less, in some we’re going to be taking more,” Tovar said.
MarketWatch countered with this story quoting the Wal-Mart spokesman calling the Bloomberg story false:
Wal-Mart Stores Inc., scrambling to right the damage that was done after a Bloomberg News report said it’s cutting orders to reduce inventory, denied the report and shot back to say the article “is completely false.”
“The report lacks the fundamental understanding of how the retail world works and the fundamental ebbs and flows of inventory,” Wal-Mart spokesman David Tovar said in an interview. “It’s typically how retail works. We have thousands of buyers across thousands of categories. We are increasing orders in some categories and decreasing in others. Categories that are doing well. We are calling those suppliers right now. We are cutting back where it makes sense. It’s not out of the blue.”
“The (Bloomberg) article is blatantly false and inaccurate,” Tovar said, adding Wal-Mart doesn’t plan to issue a press release just to say its business goes on as normal.
Investors remained skeptical. Wal-Mart’s shares originally dropped close to 3% on the report, deepening the loss of the Dow. They closed down 1.5% to $74.65 with 15 million shares trading hands. The swift stock pullback reflects a more general concern that retailers may face their worst holiday season in four years after a disappointing back-to-school selling period. Wal-Mart cut its full-year outlook after its second-quarter U.S. sales disappointed.
Cutting outlook for the full year indicates that Wal-Mart and other retailers will continue to struggle, lending some credence to the Bloomberg story that they’re reducing inventories. The news sent the overall stock market tanking, USA Today reported:
The Dow was dragged lower by Wal-Mart after a report by Bloomberg News said the retailer was cutting orders to suppliers because of a buildup in inventories.
Wal-Mart spokesman Dave Tovar said the report was misleading and that in some categories, the discounter was ordering more, and in other areas it was ordering less.
“This is business as usual,” Tovar said, noting that it was part of an ongoing process of managing the seasonality of the business based on consumer demand.
Wal-Mart shares fell $1.10, or 1.5%, to close at $74.65, after dipping as low as $73.56.
It’s hard to tell what is accurate in this case. Bloomberg, which has incredibly high sourcing and editorial standards, wouldn’t simply make up the news. A company where running a correction to a story is the worst possible outcome is in the business of getting things wrong.
But for a spokesman to call the story inaccurate is also an extreme step. Usually there is a bit more nuance to a denial. Not so in the MarketWatch story, since Bloomberg is accused of lacking basic understanding of the retail industry — not a light accusation.
If the markets are any judge, then Bloomberg is to be believed since investors sold off Wal-Mart shares and those of other retailers. So it may be a case of too little, too late for Wal-Mart on this one. It seems defensive at best, untruthful at worst. While it’s hard to tell what’s true, it’s always interesting when reporters and press people have public fights.
by Liz Hester
Chrysler Group filed for an initial public offering on Monday after its majority owner and employee union couldn’t reach a valuation. Fiat would like to own the company outright, but needs to placate the union in order to do so.
Here’s the Wall Street Journal story.
Chrysler Group LLC Monday filed for an initial public offering, a move forced by the failure of the auto maker’s Italian majority owner and its main union to agree on the company’s value.
Fiat SpA, which owns 58.5% of Chrysler, doesn’t want a share sale and is eager to own the company outright. But the United Auto Workers union health trust, holder of a 41.5% stake in the No. 3 Detroit auto maker, has demanded that its shares be offered to the public after negotiations to sell them to Fiat stalled.
In its Monday filing, Chrysler warned that if Fiat can’t get control, the Italian auto maker could turn its back on Chrysler, unwinding a deal that was a centerpiece of the Obama administration’s 2009 auto industry rescue.
Analysts and others familiar with the situation say Fiat will likely now redouble efforts to reach a private deal with the UAW.
An IPO would follow General Motors Co.’s record-breaking offering in November 2010, which at $23.1 billion was the world’s largest at the time. Analysts estimate Chrysler could be worth between $10 billion and $11 billion, depending upon market conditions.
The UAW health-care trust holds its minority stake in Chrysler as part of the auto maker’s 2009 government-led bankruptcy restructuring. The filing doesn’t state a price for the shares, or how many will be offered. J.P. Morgan is the sole underwriter listed.
The New York Times added these details about the union’s financial obligations to employees and why they’re pushing for the IPO.
The Detroit automakers have large financial responsibilities to their retirees. On Monday, General Motors said it would raise money in the bond market to buy preferred stock in the company owned by its retiree health care trust at a cost of $3.2 billion. Chrysler’s offering arises from an unusual conflict of interests, made possible by the remarkable turnaround at Chrysler since the federal government shepherded it through bankruptcy four years ago.
The United Automobile Workers health care trust has the legal right to cash in a large part of its 41.5 percent stake in Chrysler, which is a legacy of a deal brokered in 2009 by the Obama administration’s auto task force. At the time, the deal was seen as a last effort to save the faltering automaker, while preserving peace with the U.A.W.
Now, with profits flowing again and the trust in need of cash, it has formally requested that Chrysler register for a public offering covering about 16 percent of the company’s overall shares. The offering is another sign of how Chrysler — like General Motors — has recovered since the bailout. In the case of G.M., the Treasury Department is continuing to sell its ownership position, and now owns less than 8 percent of the company’s stock.
The Chrysler offering, however, is not supported by Sergio Marchionne, the chief executive of Fiat and Chrysler and the architect of the American company’s revival.
Reuters pointed out that Chrysler has come a long way since its government bailout, but still has some ways to go to reach sustainable profitability.
Marchionne and the UAW trust, a voluntary employee beneficiary association, or VEBA, have been at odds over the value of Chrysler. Their inability to agree on a price for the VEBA stake led to Monday’s IPO filing.
Chrysler has risen from a nearly dead company in 2009 to one that is stronger than its parent in Italy.
Still, Chrysler said in its filing: “Despite our recent financial results, we have not yet reached a level of sustained profitability for our U.S. operations.”
Chrysler, based in suburban Detroit, had cash and cash equivalents of $12.2 billion as of June 30. Its net profit in the first half of the year fell 21 percent to $764 million from $966 million in the previous year.
Marchionne had wanted to avoid the IPO because the sale could delay his plans for a full merger of the two companies. A full merger would make it easier – but not automatic – to combine the cash pools of the two companies, giving Fiat more funds to expand its product lineup.
Currently, Chrysler and Fiat are forced to manage their finances separately, even though they are run by the same executive team.
USA Today made an excellent point about valuing the trust’s shares.
But how to value the trust’s share? As Brent Snavely reported last week in the Detroit Free Press, the trust thinks its stake is worth $5 billion. A JP Morgan analyst puts the value at $3 billion, a figure likely closer to what Marchionne is willing to embrace. Asked last week about the trust’s higher valuation, Marchionne was quoted by the LaPresse new agency, via AP, as saying, “Let them buy a lottery ticket” to make up the difference.
Of course, it’s hard not be sympathetic to the trust. The more money they get for their share of Chrysler, the more that will be available to make good on retiree’s health care coverage.
But it sounds like Marchionne would rather stake his companies’ future on IPO shares — with the market setting the price — and not on lottery tickets.
It’s definitely an unconventional way to go public. Let’s hope that the market will give the trust closer to the value it needs in order to pay its obligations. And that Chrysler’s management can get onboard with the plan.
by Liz Hester
Blackberry is struggling to stay relevant as it loses ground to Apple and other smartphones, especially in the business market where it once held a near monopoly. Covering a businesses reinvention is always interesting, especially as the technology company struggles to keep customers. Often once customers make the switch, they don’t want to come back.
The Wall Street Journal wrote this story:
BlackBerry Ltd. begins life this week as a company focused on selling smartphone services to businesses, a risky, last-ditch bet that it can hang on to rapidly eroding ground in the market it pioneered.
The plan appears to be to position the company as the go-to provider of systems to manage smartphone use for employers like the government and banks, where the need to ensure security is at a premium.
That approach plays to the company’s strengths in markets where it has suffered the least damage, but BlackBerry’s position in the business market has eroded greatly amid gains by devices like Apple Inc.’s iPhone. It also faces tough competition from startups and established rivals like Microsoft Corp.
Executives responsible for buying smartphones and the software to manage them say BlackBerry faces long odds.
Tracey Rothenberger, chief operating officer of Ricoh Americas Corp., Malvern, Pa., said that fewer than 500 of the 9,000 smartphones he manages for the printer and copier maker are BlackBerrys. The remainder are made by Apple or powered by Google Inc.’s Android software. “For me, it’s kind of ‘game over’ for them,” he said.
The move comes as Blackberry is succumbing to market pressure about its earnings and ability to continue to make money. The Guardian had this story on Saturday:
With the fall of Nokia looming over him, this weekend will be an uncomfortable one for Thorsten Heins, chief executive of BlackBerry. While the Finnish firm sold its mobile phone business to Microsoft for €5.4bn (£4.5bn) this month, questions are swirling as to how long BlackBerry – which signalled its distress in August by putting itself up for sale – can survive, and in what form.
Things are so bad that on Friday night, market rumours forced Heins to announce the top-line quarterly results a week early. And they are grim: an operating loss of up to $995m (£620m), including $960m of inventory writedowns on its new Z10 handsets released in January, a net loss of more than $250m, revenues half what analysts expected at $1.6bn, and phone shipments of 3.7m – which Apple will comfortably exceed with its new iPhones this weekend alone.
For a company that once dismissed the iPhone for having no keyboard (a key selling point for BlackBerry phones), it’s a humiliation. The low shipment figure exposes Heins’s claim in April that the new Q10 phone – the first keyboard-equipped model using its new BB10 software – would sell “tens of millions”. It might have sold a million.
Now the question is turning to how long BlackBerry has to go. On Friday, the company said it will cut 4,500 jobs, roughly 40% of its 11,000 total worldwide, adding to 7,000 jobs cut in the two previous financial years. It will reduce its future phone portfolio from six to four.
Announcing quarterly results early and layoffs is rough. What’s even worse is all the speculation around potential bidders for the company and no one actually pulling the trigger to make an offer. The latest was a New York Times story saying that Blackberry’s founder was considering an offer, but none came during the weekend:
Mike Lazaridis, the co-founder of BlackBerry who stepped down as co-chief executive in 2012, has reached out to private equity firms about a possible bid for the troubled company.
Mr. Lazaridis has separately approached the Blackstone Group and the Carlyle Group about making an offer, according to people familiar with the matter. These people cautioned, however, that the talks were preliminary and might not lead to any bids.
The potential of any effort to take BlackBerry private was muddied further on Friday, as shares in the company tanked after the company announced quarterly revenue far below analyst expectations. BlackBerry shares listed in the United States plunged 17.1 percent to $8.73.
The Journal had a separate story about the company’s layoffs, which talked about the how hard the last several years have been on employees who don’t know if they’ll have a job or not:
BlackBerry’s spectacular fall has taken a heavy toll on current and former employees of the smartphone maker, which once controlled more than half of the U.S. smartphone market. That has dropped below 3%, according to IDC. BlackBerry employed 12,700 people as recently as March, and the latest cuts—about 4,500 employees—will weigh heavily on this town of about 100,000 people 68 miles west of Toronto.
BlackBerry executives began to realize how badly their new line of phones was selling this summer. Smaller rounds of layoffs had already started, but it became clear that more drastic cuts were needed, people familiar with the matter said.
With a push from board members, the company in August set up a committee to explore the company’s strategic alternatives, including a possible sale. The hope, people familiar with the matter said, was to sell quickly, before BlackBerry’s dismal financial results were announced.
Employees said that during that same period there was confusion about the future of various projects and mixed messages from managers. Some employees said they were still working on new phones but held out little hope about the company’s prospects. At the same time that the company announced the layoffs, it said it would write down nearly $1 billion in unsold phones.
It seems like every week there’s a new story about Blackberry’s next move to save the company. What isn’t apparent is how they’re going to do it. At least it’s keeping the technology reporters supplied with good stories.
by Liz Hester
To fund its gigantic $130 billion purchase of Vodafone’s stake, Verizon Communications held the largest bond sale in history, raising $49 billion from the markets.
The Wall Street Journal story called the sale a “frenzy” of demand:
Verizon Communications Inc.’s $49 billion bond offering sparked a frenzy across Wall Street on Wednesday as investors clamored to buy a piece of the largest corporate debt sale in history.
Lured by what many saw as a bargain price, buyers placed orders for about $100 billion of the new bonds, and trading in the market afterward was frenetic. Verizon bonds were the most-traded for the day, with billions of dollars’ worth changing hands, according to MarketAxess.
Verizon executives called prospective investors throughout Tuesday, continuing into the evening even after they knew they had more than enough demand to sell all the debt they wanted, said people familiar with the matter. In the end, more than 1,000 investors submitted orders for the bonds.
Some investors put in orders so large that underwriters called them back to be sure they had the cash to cover the sums they asked for, said people involved in the sale. Some had their orders fully filled and even turned a quick profit selling debt later Wednesday. Other investors who weren’t able to buy bonds directly jumped in to buy the debt in the secondary market.
The Bloomberg story said that Verizon is paying a premium to get investors interested in the deal:
Verizon Communications Inc. (VZ) is poised to pay investors a premium on an unprecedented $49 billion of bonds, a cost Apple Inc. (AAPL) escaped during its then-record $17 billion offering four months ago.
The telephone company may sell $11 billion of 10-year bonds today at a yield that’s 225 basis points more than Treasuries, according to a person with knowledge of the issue. The yield is 47 basis points more than investors demand to own bonds with similar maturities and BBB ratings, according to data compiled by Bloomberg. Apple issued $5.5 billion of 10-year bonds on April 30 at less than the market rate.
While Apple had $145 billion of cash and no debt when it tapped credit markets for the first time in more than a decade, New York-based Verizon will add to its $49 billion of bonds already outstanding to bolster a cash position that accounts for less than 2 percent of the $130 billion it needs to obtain full control of Verizon Wireless from Vodafone Group Plc.
Verizon is marketing eight portions of dollar-denominated bonds, said the person, who asked not to be identified, citing lack of authorization to speak publicly. It’s also postponed investor meetings in Europe linked to the deal that were scheduled to begin tomorrow.
The Associated Press story said Verizon paid up in order to get the deal done quickly:
Verizon probably decided to pay higher interest rates because it needed to wrap up its $130-billion buyout quickly, bond investors said.
The buyout “is a big strategic deal for them, and they needed the money,” said Michael Collins, senior investment officer of Prudential Fixed Income, who bought Verizon bonds during Wednesday’s sale.
Verizon’s massive bond sale comes at a crucial time for bond investors. In June, Federal Reserve Chairman Ben S. Bernanke said the central bank was considering pulling back on its bond-buying program, which has kept interest rates at historical lows in an effort to stimulate the economy.
As a result, the yield on the 10-year Treasury note, the benchmark for all bonds public and private, is at 2.96%, almost double the 1.63% yield from early May.
MarketWatch pointed out that the secondary market has been struggling with liquidity issues, but Verizon demand was strong:
Liquidity in the corporate bond secondary market has been declining in recent years, as highlighted in a Financial Times story Wednesday. Nonetheless, secondary trading on Verizon bonds was strong as investors gobbled up the new debt.
Verizon was by far the most actively traded issuer in the high-grade corporate debt market on bond-trading platform MarketAxess on Wednesday. On the platform, $575.3 billion of Verizon debt had traded as of 11:20 a.m. Eastern, roughly 13% of the $4.38 billion of high-grade corporate debt that had been traded on MarketAxess.
It’s a huge win for Verizon and for the banks that handled the sale. While the fees on bonds are lower, by sheer volume this one should help those banks make their targets for the quarter. Only time will tell if there is real investor demand for paper – especially bonds that pay such a premium – or if this was a one-off deal for a well-known company. I’m sure there are many other corporations considering deals and how to pay for them, and looking to learn a trick or two from Verizon.
by Chris Roush
Business journalist Francine McKenna wishes that more of her industry colleagues would attempt to verify claims of revenue and net income by private companies before printing them.
McKenna writes, “Maybe some journalists are intoxicated by access to the non-public numbers some would pay a lot to know for sure. Maybe it’s just too hard. Worst case scenario journalists can be used as cogs in the equity market pump and dump machine.
“Summary level revenue and profitability numbers for public companies, those listed on U.S. stock exchanges, are easily verified. Go to the SEC filings —10-K annual reports, 10-Q quarterly filings, 14A annual proxies, 8-K filings of other legally required to be reported events — to see if what an executive says matches what he or she told regulators and markets in the filed financial statements. Even earnings calls and earnings releases should match what’s eventually filed or executives must later must explain why not.
“Readers may think that online or in print, whether in a magazine or a newspaper, writers have to check the truthfulness of what politicians and business executives say before they print it. More and more they don’t. Intensely partisan rhetoric during the last election cycle led to complaints on both sides that major media allowed politicians and their operatives to make claims about each other in debates, in print and online that weren’t true. Lies took on a life of their own. ‘Unspilling the milk’ was almost impossible. A cottage industry of political fact-checkers —FactCheck.org, Politifact, and media-watching bloggers and journalists — scoured public statements and news and magazine articles for blatant, and not-so-blatant, examples of lies and fibs that slipped into campaign season reports.
“There’s no such service dedicated to checking non-public and pre-IPO financial puffery and blustering. The hype before the Facebook IPO is an example of unverified financial information gone wild. When the New York Times broke the story of Goldman Sachs’ investment in Facebook on January 2, 2011 it was obvious a certain segment of the investing population willingly ignored the lack of audited, verifiable, complete financial information when offered a ‘hot and exclusive’ opportunity. The media was more than willing to repeat unaudited, unverified, and often incomplete information in its stories, true or not. Reuters eventually reported that disclosures provided to Goldman Sachs’ chickens, I mean clients, intended to entice them to make a $1 million minimum investment, weren’t even audited results.”
Read more here.
by Chris Roush
Wall Street Journal corporate bureau chief Andrew Dowell sent out the following staff promotions on Monday morning:
We’re pleased to announce a number of additions to the newly integrated Corporate Bureau. The additions fill recently vacated positions, reflect our merger with Newswires and follow a realignment of the WSJ’s retail coverage.
Paul Ziobro joins us to cover consumer products and retail. He’s responsible for retailers including Target and the dollar stores and will write broadly about consumer trends. Paul joined Dow Jones in 2005 writing for our private-equity newsletter, where he covered buyouts through the peak of the LBO boom, then moved over to Newswires and worked his way through the restaurant and consumer product beats. He earned his bachelor’s degree in journalism from Boston University. (@pziobro)
Shelly Banjo has relocated to New York from the Journal’s Dallas bureau. She brings along her coverage of big retailers including Wal-Mart, Costco, Home Depot and Lowe’s. Shelly is making a round trip to New York, where she was a charter member of the Greater New York section, and has covered philanthropy, wealth management and personal finance. She graduated from Northwestern University, started at the Journal as an intern in Chicago in and is pursuing her MBA at New York University’s Stern School of Business. (@sbanjo)
Sara Germano joins the bureau as a general assignment reporter from WSJ.com, where she handled the evening editing shift and managed the homepage on weekends. A driven reporter, Sara devoted her off hours to working for the Journal’s sports page, where she wrote stories including an investigative look at mismanagement at the US track and field organization that ran on Page 1. Sara graduated from Fordham University in the Bronx, where she majored in philosophy and studied dance part time at the Alvin Ailey School. (@germanotes)
Ryan Knutson comes aboard to cover telecom. He is responsible for carriers like Verizon and Sprint, as well as the broader social, technological and security issues inherent in the telecom industry. He spent the previous three years reporting and co-producing stories for PBS Frontline. His work there included an investigation into the high rate of accidental deaths among cellphone tower workers that earned him a spot as a Loeb award finalist this year. Ryan graduated from the University of Oregon and first entered the Journal’s orbit as an intern in San Francisco. (@Ryan_Knutson)
Tom Gryta also joins us to cover telecom. He is responsible for AT&T and T-Mobile and also will pursue broader stories about the industry. Tom previously held the telecom beat at Newswires, where he worked for the past year after returning from a Knight-Bagehot fellowship. He started with Dow Jones in 1999 as a news assistant in London and later joined the U.S. health group, where he covered biotechnology and pharmaceuticals. In 2009, Tom was part of a team that won a Sabew award for coverage of Pfizer’s acquisition of Wyeth. (@TGryta)
Drew FitzGerald signs on to cover electronics retailers like Best Buy and Radio Shack, as well as the long haul telecommunications companies that provide the backbone of the Internet. Drew joined the Newswires in 2011 and most recently was a reporter covering technology companies. He earned a bachelor’s degree in journalism at Boston University and prior to joining Dow Jones worked in Washington for Maine’s Bangor Daily News and in Denver at The Denver Post. (@DrewFitzGerald)
Please join us in welcoming these reporters to their new assignments.
Last week, I happened to be listening to “Mike & Mike,” a morning ESPN Radio show where the hosts discuss the major sports news of the day. That day they were discussing news how Ryan Braun, a player for the Milwaukee Brewers who has been accused of steroid use and suspended from baseball, was personally calling season ticket holders to apologize for his mistakes.
The hosts were debating the merits of Braun’s recent apology, wondering if it were a classy move or a shameless part of a PR stunt. Furthermore, the host who thought this was a simple PR stunt was also convinced fans would not want to have a cordial conversation with Braun, but rather hang up on him or yell at him for being a poor role model to children.
The two sides of the debate were so sharply drawn, it struck me as the classic media debate over any troubled business (or business executive) and the difficult nature of rebuilding reputation once it is lost.
While I am in no way involved with Braun or his team of advisors, I do think he’s getting some good advice. Well, at least he’s getting some decent PR advice right now. That is because he is focused on the long, arduous and thankless task of actually building a reputation again with the people that matter.
As is so often said, a reputation takes a lifetime to build but is lost in a second. I like to think that building reputation is akin to the little engine that could, it requires slow, steady and consistent performance over time. No one action can give a company a good reputation. Even donating $1 billion to cancer research, while admirable and positive, cannot give a company a sterling reputation in one move (though it certainly would be a big step in the right direction).
So if getting that little engine up the hill the first time was hard, getting back to the peak after faltering is near impossible.
What PR professionals all too often forget though is that good press did not get the little engine to the top of the hill in the first place and can do even less the second time around. All the media does in building reputation is to help underscore performance, merely informing the world of an accomplishment, not creating one itself.
Which brings me back to the ESPN Radio piece. The calls to season ticket holders was not something Braun was doing to make a big show of it, he was simply moving along the tracks toward recovering something of his reputation. The vigorous debate only showed just how far he still has to go.
These same principles apply to rebuilding a business’ reputation. Quiet actions move you down the track. PR people who find themselves actively touting a battered companies image all the time also will continue to run into skeptical reporters that will only make that climb back to the top harder.
Let the business perform, and the media story will follow.