Update 12-24: TalkingBiz posted an update to this story on Wednesday: “Reuters editor in chief says story wasnâ€™t spiked due to pressure.”
News organizations are supposed to break news, not make it. Too often, though, in my nearly 20 years in this business, the news has become the news. Jayson Blair, Patricia Smith, Stephen Glass, Rick Bragg, the reporting leading up to the Iraq War â€¦ the list goes on and on, and those are just the high-profile cases. Friends of mineâ€”good, honest, hard-working journalists looking to tell the truthâ€”have had stories killed for all sorts of reasons that had nothing to do with the accuracy or relevance of the pieces.
And now, in my own back yard, comes word of the latest journalistic stinker. In a story that is making the rounds in the blogosphere, Reuters, the news arm of Thomson Reuters, the parent company of HedgeWorld, apparently killed a story about Steve Cohen at Cohen’s request.
When I read about the incident, I was befuddled and beside myself. At first I didn’t want to believe it. Then, the more I thought about it the more I realized that given the state of journalism today, it really wasn’t all that surprising. What was surprising, in fact, was that I hadn’t heard about something like this before.
Some cancerous chickens are coming home to roost in journalism. This was a profitable business for a long time. The information monopoly, as monopolies tend to be, was a lucrative one for those who controlled it. Profits attracted businesspeople, who moved up the chain of command both on the editorial side and the business side by devising plans to increase profits still further. Reporters at larger papers and news outfits started earning more money, which helped change the makeup of those seeking jobs in journalism. And the rise of the public relations industry meant that for many journalism was just a stepping stone to real money and power.
One consequence, as I see it, is that at many larger, publicly-owned news organizations, the editorial ranks became diluted by so-called professional journalists. These are people with lots of business sense, courtesy of their business training, but much less news sense.
Then the Internet connected everyone and democratized the flow of information. Suddenly newspapers, TV stations, radio stations and wire services no longer enjoyed a monopoly. As audiences shifted their attention to the new shiny ball of the Internet, revenue at the traditional news outlets began to fall. This marks the beginning of corporate journalism’s Epic Fail.
With business people in charge, news organizations reacted to the Internet the way business people are trained to react: first they viewed it as a threat and sought to marginalize it by establishing their own presence on the Web and giving away their content for free. Then, when advances in technology outpaced that reaction, they tried charging for content. When that didn’t work and audiences declined further, the news organizations started chopping off non-revenue producing limbs (read: editorial) to reduce costs. Now, with much smaller staffs unable to keep up with the 24-7 torrent of information, the news organizations have fallen even farther behind.
It’s crisis time, and the MBAs appear to be out of answers. In a crisis you want strong leaders who understand strengths and weaknesses and who absolutely and unequivocally believe in the core mission. They must be able to communicate and disseminate that mission throughout the organization and beyond.
Thomson Reuters’ core mission is contained in the company’s Trust Principles.
1. That Thomson Reuters shall at no time pass into the hands of any one interest, group or faction;
2. That the integrity, independence and freedom from bias of Thomson Reuters shall at all times be fully preserved;
3. That Thomson Reuters shall supply unbiased and reliable news services to newspapers, news agencies, broadcasters and other media subscribers and to businesses governments, institutions, individuals and others with whom Thomson Reuters has or may have contracts;
4. That Thomson Reuters shall pay due regard to the many interests which it serves in addition to those of the media; and
5. That no effort shall be spared to expand, develop and adapt the news and other services and products so as to maintain its leading position in the international news and information business.
Take a closer look at that page and you’ll see this: “Customers across the world depend on us to provide them with reliable and objective news and information. This means that we have a special need to safeguard our independence and integrity and avoid any bias which may stem from control by specific individuals or interests. The Thomson Reuters Trust Principles were adopted in 1941 and include the preservation of integrity, reliability of news, development of the news business and related principles. Today, these principles are fundamental to our entire business.
“Integrity,” independence,” “freedom from bias,” “reliableâ€¦.” These words represent the core mission of this news organization. The Trust Principles are intentionally brief and to-the-point. It’s not complicated. There’s not a lot of room for interpretation there.
I cannot reconcile these principles and what they represent with a decision to kill a story that, by all accounts I’ve read, was factually correct, relevant and timely. Worse, the decision at the very least appears to be connected to a complaint from the subject of the story to the highest levels of Reuters management. What to make of this?
As a news organization, all we have connecting us to our audience is our credibility. When we make mistakes, when we miss the point, when we fail to publish in a timely mannerâ€”each of these creates a little crack in that credibility. Once enough cracks form over time, the credibility is eroded and ultimately broken apart. At that point it doesn’t matter how many orange dots you have swirling around your TV commercial or how intelligent you claim your information is. Once that bond is broken you’re screwed.
Because Reuters is my company, there’s a big part of me that hopes this incident has been blown out of proportion; that the blogs don’t have the whole story. I fear that’s not the case, however. The way it looks now is positively scandalous. And as a journalist it makes me almost physically ill to think about it.
I hope someone above me addresses the situation publicly, because lord knows not addressing it ain’t working. Right now this incident is relatively contained (although it was the most viewed post on ZeroHedge as of Tuesday). But by next week, this will be all over the placeâ€”Romanesko, Drudge. From there it could get real ugly real fast.
And herein, I hope, lies a lesson for whomever killed Matt Goldstein’s Steve Cohen story: When you make a decision like that, under those circumstances, the back story will get out. And the fallout from that back story will always, always be worse than the fallout from the story itself.
I know I’m right â€¦ but when?
These are the news doldrums. Were it not for Steve Cohen’s ex-wife and the ongoing banker police blotter, we’d have nothing but end-of-the-year retrospectives and “look-ahead” pieces to digest. I’d offer my own take on the year ahead, but I was so far off on 2009 a year ago that I’d better just shut up.
At the end of 2008, I was telling anyone who asked that I thought the hedge fund industry would be smaller, more competitive and truer to its roots at the end of 2009. I figured the culling the beta jockeys would be painful, but that like stretching your knee after surgery the pain would be worth it in the long run. I figured we’d be looking at a hedge fund industry in the $1.5 trillion range, maybe slightly smaller. I figured returns would improve but that more investors would shy away until hedge funds proved they knew how to hedge.
And yet here we are, $2 trillion in assets by some estimates and looking at 20% returns on average. It’s like 2008 and the first quarter of 2009 never happened. Which, of course, is the perfect set-up for another disaster. It seems like the time it takes for us to forget the most recent destructive period and re-engage the exact same destructive behavior that got us into trouble before is getting shorter. In just 12 months we’ve gone from thinking our economic and finance models were ready to careen off the tracks and into a canyon, to full steam ahead toward economic recovery and a return to the “good times.”
Stock markets: up. Home sales: up. Economic activity: positive and growing. Unemployment: down. As David Lee Roth might say, “the party’s back, so hide your valuables!”
I still think more austere times lie ahead. I don’t trust the rally, I don’t think we’ve seen the last of the bad hedge fund returns and I definitely think there’s more thinning of the hedge fund herd ahead. There’s still a lot of beta out there, and a lot of misplaced optimism.
News item: Business spending holds back economic growth
“I expect the fourth quarter (GDP) will still be strong with retail sales better-than-expected, but business spending is still a wildcard. There is a lot of cash, but I’m not sure if the business spending is there yet,” said Christopher Low, chief economist with FTN Financial in New York.
That’s paragraph 8. In the second paragraph, we learn: Analysts polled by Reuters had forecast the report to show GDP, which measures total goods and services output within U.S. borders, unrevised at a 2.8 percent growth rate in the third quarter.
Prognosticating about the economy isn’t really much different than sports wagering.