Tag Archives: New York Times
TheDeal.com executive editor Yvette Kantrow writes in her Media Maneuvers column that recent stories by the New York Times looking into allegations that Morgan Stanley CEO Stanley Mack was involved in insider trading with hedge funds and BusinessWeek looking into shenanigans by private equity firms both lack the facts that support their arguments.
Kantrow wrote, “But the fact that Aguirre’s evidence is so thin is problematic for the Times’ overheated coverage of this hedge fund ‘scandal.’ It’s hard to get worked up over an investigation that didn’t happen when the only proof of potential wrongdoing by the two main suspects is the fact that they are friends. (We bet they even play golf together. Quelle horreur!) But the Times is convinced that hedge funds are hotbeds of insider trading, that the SEC is looking the other way and that it’s going to end badly. Some of that may be true. Still, there has to be a better way of exposing those ills than throwing a bunch of half-baked accusations at the wall and hoping a few stick. If you want the glory of being first to call the fall of hedge funds, you’ve got to do the work.
“As the Times leads a jihad against the evil of hedge funds, BusinessWeek continues its crusade against rolling-in-the-dough private equity. Less than three months after bringing us the sensational headline ‘Buy It, Strip It, Then Flip It’ on its story about the initial public offering of Hertz Corp. by its buyout owners, BusinessWeek strikes again with the cover story ‘Gluttons at the Gate: How private equity is using slick new tricks to gorge on corporate assets.’ So, BusinessWeek, tell us how you really feel.
“Inside is the usual smorgasbord of complaints about how buyout shops do business, from how much debt they lay on their companies to the ‘dubious’ fees they charge to the record dividends they ‘extract.’ ‘Some private equity firm executives are being investigated for outright fraud,’ the magazine adds. Whom is it referring to? John A. Orecchio of AA Capital Partners Inc., a Chicago firm with $194 million under management. Not exactly Henry Kravis and his ilk.
“Still, an indictment is an indictment. The problem is, BusinessWeek, like the Times in the Mack case, can blow lots of charges into the air, but it can’t begin to close the case. Yes, multiples are rising. True, buyout deals have gotten bigger. But even BusinessWeek feels compelled to qualify nearly every sensational charge. The story leaves the impression that BusinessWeek, like the Times, just wants to position itself for when, inevitably, something bad does happen.”
Read more here.
Ken Shepherd of the Business & Media Institute noted that a front page story in the New York Times earlier this week by Keith Bradsher took a reporting angle that was the exact opposite of reports earlier this year on CNN’s “Lou Dobbs Tonight.”
Shepherd wrote, “Aside from Dobbsâ€™s unfounded fear of free trade, his report looks laughable in hindsight. It appears the red dawn Dobbs feared from communist China is far from breaking over the horizon.
“â€™Despite growing anxiety that the Chinese would quickly seek to conquer yet another important industry, it now looks as if it will be at least another several years before Chinese automakers start exporting large numbers of cars they both design and make,â€™ Times automobile reporter Keith Bradsher wrote in his front page article.
â€œAside from poor aesthetic design, poorly organized production plants, and inadequate safety standards, Bradsher added that â€˜the global marketâ€™ for motor vehicles â€˜has become so integrated and competitive that China will have to move much fasterâ€™ than Toyota or Honda did when they debuted at American dealerships.â€?
Read more here.
University of Illinois law professor Larry Ribstein critiqued a recent New York Times article by well-known business journalist Gretchen Morgenson by arguing that mutual fund voting on company proposals is not as conflicted as the reporter stated.
Ribstein wrote, “Morgenson makes minimal efforts in today’s article to present the other side by getting quotes from Fidelity. Obviously these self-interested defenses do not have the same impact as would reporting evidence from neutral academic studies. Moreover, Morgenson deliberately slants her writing to minimize the impact of the rebuttals. For example, while Morgenson does state Fidelity’s position that it will oppose anti-takeover provisions proposed by management and support shareholders in other respects, this paragraph is immediately followed by the quote about conflicts of interest presented at the beginning of this post.
“Morgenson’s conflict-of-interest slant is critical to her approach to this issue, as is evident by how often it appears in her stories. Indeed, without this slant there would hardly be a story. Even Morgenson has to acknowledge that mutual funds do not vote rigidly for corporate managers. In any event, her readers care about fund returns. They don’t care whether their funds are activists unless it’s evident any such activism would help the bottom line. And whether it would requires them to accept that Morgenson and the tiny stable of shareholder “activists” she trots out week after week know better than the mutual funds how they should vote. For example, ‘activists’ have long touted separating the board chair and ceo positions â€“ a position that doesn’t look so self-evidently brilliant in light of the dysfunction it brought to HP.
“So to create a scandal about mutual fund voting, Morgenson needs smoking guns. She’s tried techniques other than the conflict of interest angle. For example, Morgenson tries the populist gambit, lamely asserting today that Fidelity doesn’t care about executive compensation issues because its chief executive is so rich. And she ends with a murky story about Fidelity’s support for efforts to water down SOX provisions that are unpopular with much of corporate America in exchange for some sort of exemption â€“ a story Fidelity denies. These misfires demonstrate how badly Morgenson needs the conflict of interest angle.”
Read more here.
Adam Bryant, the former Newsweek business editor who returned to the New York Times earlier this year, has been named deputy editor for enterprise for the business section, according to a memo from business editor Larry Ingrassia posted on the Romenesko blog.
Bryant succeeds Paula Dwyer, who is moving to the paper’s Washington bureau. Dwyer was once a BusinessWeek reporter based in DC.
Ingrassia wrote in the memo, “Since rejoining the Times earlier this year from Newsweek, Adam has demonstrated his talents as an editor, both on enterprise stories and in helping direct coverage of some major running stories, like the mounting problems of the American auto companies.
“Indeed, a number of you have volunteered in recent weeks that Adam would make a great replacement for Paula. I couldn’t agree more.
“Adam’s good story sense, his deft touch with copy and a feel for good presentation that he developed while he was Newsweek’s business editor make him a particularly good fit for this job. He’ll oversee the daily display, working closely with our design, photo and graphics team, as well as work with cluster editors and reporters on page one stories. For now, Adam will continue to oversee the reporters who have been in his group.”
Read more here. Ingrassia also said that he was looking for another editor.
I wrote back in July that Bryant’s departure from Newsweek was one of the most significant events in business journalism during the first six months of the year because it signaled a decreasing emphasis on business coverage by the news magazine.
The New York Times’ Elizabeth Jensen wrote Monday about how CNBC is trying a show called “Fast Money” hosted by former Bloomberg reporter Dylan Ratigan that brings out some of the issues with broadcast business journalism that hurt the network’s reputation after the dot-com bubble burst.
Jensen wrote, “Later shows like the successful ‘Mad Money’ and ‘Fast Money’ appeal to a much more reactive kind of capitalist: the day trader who may not care about trade deficits and who just wants to pick stocks and get rich.
“This type of show is tricky for CNBC. In the day-trading era of the late 1990â€™s, the network was criticized for putting on many experts who wildly pushed stocks without providing analysis or skepticism.
“But network executives said that they had found a way to do such programming responsibly. ‘Weâ€™ve been very sensitive about wanting to do this the right way,’ said Jonathan Wald, who was named senior vice president of business news in June.
“The showâ€™s premise, Mr. Ratigan said, is simply this: ‘The world goes round. Letâ€™s turn it into money.’ As financial news has become a mere commodity, available everywhere, he said, CNBC has had to move away from simply presenting information.”
Read more here.
A New York Times story Monday about the attempts Hewlett-Packard took to discover a leak among its board members notes that the computer maker took other measures beside obtaining phone records of journalist.
Reporter Damon Darlin wrote, “Those briefed on the companyâ€™s review of the operation say detectives tried to plant software on at least one journalistâ€™s computer that would enable messages to be traced, and also followed directors and possibly a journalist in an attempt to identify a leaker on the board.”
Later, Darlin reported, “At least one reporter, Dawn Kawamoto of the online technology news service CNET, may have been followed as part of the 2006 investigation, said a person briefed on the investigation. Ms. Kawamoto was a co-author of an article on a senior management meeting in January.
“The detectives also tried to plant software in the computer of an unspecified CNET reporter that would communicate back to the detectives, people briefed on the company review said. Ms. Kawamoto said in an interview this month that prosecutors had told her that such a ploy may have been used, but said she was not aware of any surveillance.
“Representing themselves as an anonymous tipster, the detectives e-mailed a document to a CNET reporter, according to those briefed on the review. The e-mail was embedded with software that was supposed to trace who the document was forwarded to. The software did not work, however, and the reporter never wrote any story based on the bogus document.”
Read more here.
New York Times business reporter Kurt Eichenwald is leaving the newspaper to become a member of the new business magazine, Conde Nast Portfolio, according to a memo posted this afternoon on the Jim Romenesko blog.
Eichenwald will start at the magazine on Oct. 1 and be a senior writer and investigative reporter. The first issue of the magazine is expected in May 2007.
The memo stated, “For the past two decades, Mr. Eichenwald has written about corporate corruption and financial topics.
“In 1988, he began reporting for the paperâ€™s business section, covering Wall Street, corporate takeovers and insider trading scandals. In 1992, he began writing the ‘Market Place’ column and covering the unfolding scandals at Prudential Securities. Since then, he conducted an array of high-profile investigations into fraud and conflicts in American health care; price-fixing in the food and feed industries; corruption at Enron, WorldCom and Arthur Andersen; and crimes involving the exploitation of children over the Internet.
“Mr Eichenwald has won numerous honors for his work. In 1996, he was awarded the George Polk Award for his articles about deficiencies in the American System of dialysis care; in 1998, he was again a Polk Award winner for a series of articles about allegations of corruption at the Columbia/HCA Healthcare Corporation. He was a Pulitzer Prize finalist in both 2002 and 2000.”
Read more here.
Forbes.com CEO Jim Spanfeller wrote a letter to New York Times business editor Larry Ingrassia and public editor Barney Calame that criticizes the Times’ recent story that called into question the traffic on the Forbes’ Web site, according to Advertising Age.
Ad Age’s Nat Ives wrote, “‘Shame on you!’ his letter continued. ‘Not for promoting the Times’ own log file numbers, but for suggesting we are somehow wrong in promoting our log file numbers while doing so yourself and failing to point it out specifically in the article. That smacks of competitive hypocrisy.’
“In a message sent to Mr. Spanfeller today and shared with Advertising Age, Mr. Ingrassia disputed Mr. Spanfeller’s assertions that the article omitted certain key points. Mr. Ingrassia agreed, however, that the article should have described how the Times describes its web traffic.
“‘You’re right,’ he wrote. ‘Precisely because of the competitive issue that you raise, we endeavor to say what the Times Co.’s practice is whenever writing about a media issue. We failed to do so in this case and should have, though after conferring with our standards editor, I don’t think that this warrants a correction.’”
Read more here.
George Mason University economics professor Russ Roberts is upset about an article written in the New York Times on Tuesday about worker’s wages and productivity, two basic concepts in economics reporting.
The article in question is the Times front-page article by Steven Greenhouse and David Leonhardt, titled â€œReal Wages Fail to Match a Rise in Productivity.â€?
Roberts wrote, “Let me repeat the key sentence [from the article]:
“The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation.
“Thatâ€™s a very strange sentence for many reasons:
“1. Why would you use a measure of compensation that ignores benefits, an increasingly important form of compensation?
“2. Why would you use 2003 as your starting point when the recession ended in November of 2001?
“3. There are no government series that I know of on median earnings. Where did those data come from?
“Thereâ€™s a chart accompanying the article. It tells the reader that the median hourly pay data are from the Economic Policy Institute. The Economic Policy Institute has a policy agenda. Their main issue is the alleged stagnant or falling standard of living of American workers. They support a higher minimum wage and the strengthening of labor unions.
“â€¦ for every year since the recession of 2001, real hourly compensation has actually increased. Itâ€™s up since 2003 as well. And this year itâ€™s up quite dramaticallyâ€¦
“As I have mentioned here beforeâ€“the standard claims you hear about laborâ€™s share declining come from using wages without other forms of compensation. When you include benefits, laborâ€™s share is virtually a constant at 70% of national income and has been steady since the end of World War II â€¦”
Read more here.
David Altig, director of research at the Cleveland Federal Reserve, agrees with Roberts, as does Harvard University professor Greg Mankiw. However, Cal-Berkeley’s Brad DeLong calls the article “thoughtful and reliable.”
New York Times reporter Peter Edmonston wrote in Monday’s newspaper that the traffic numbers for Forbes.com are being questioned by some of its competitors as being the No. 1 Internet site for business news.
Edmonston wrote, “But a closer look at the numbers raises questions about Forbes.comâ€™s industry-leading success. For its claim of a worldwide audience of nearly 15.3 million, it has been citing February data from comScore Media Metrix, one of the two leading providers of third-party Web traffic data.
“There are several problems with that statistic, though, and comScore has since revised the figure downward to less than 13.2 million as part of a broader revamping of its worldwide data for many sites. Jack Flanagan, executive vice president at comScore Media Metrix, said the new figures were released ‘a couple of months ago’ after it changed its methods for estimating global audiences.
“There is also the question, given Forbes.comâ€™s user figures, of where those visitors were going. According to comScore, 45 percent of its February traffic went to ForbesAutos.com, a companion Web site heavy on car reviews and photos. About three-quarters of the ForbesAutos.com traffic came from outside the United States.
“Since February, comScore said, Forbes.comâ€™s traffic has tumbled. In July, Forbes Web sites drew 7.3 million unique visitors worldwide, almost a million of whom went to ForbesAutos. That put Forbes.com slightly below Dow Jones (whose online properties include The Wall Street Journalâ€™s Web site and MarketWatch), CNNMoney.com (which includes the sites of Fortune and Business 2.0 magazines) and sites affiliated with Reuters, each of which comScore says had some 7.6 million visitors that month.”
Read more here.