Whither the M&A scoop?
Deal scoops are the most basic currency of business journalism. Once a deal is certain to get done, but before it’s officially announced, an M&A banker on one side or the other (it’s nearly always the bankers, rather than the lawyers or the actual companies doing the deal), tactically leaks news of the deal to a carefully-chosen source.
Virtually everybody wins when this happens. The leak always takes place when markets are closed, so there’s no risk of insider trading on the news. The banker leaking the news gets to control the story, since the journalist isn’t going to call around before publishing it. And the journalist gets a big scoop.
I’ve never been particularly impressed by these scoops: if a piece of news is going to come out in a press release in a few minutes or hours, then getting it first, while markets are closed, has little value to readers. But journalists fight incredibly hard to get them, and financial journalism’s biggest names have been made this way — think Charlie Gasparino or Andrew Ross Sorkin.
But given the value being created for bankers and journalists alike by the existence of the market in scoops, it’s notable when a deal like this one comes along with no advance word at all — not even someone reporting it breathlessly on CNBC five minutes before the press release comes out.
Is there a reason for this dog not barking? It might conceivably be a function of the buyer in this case. Leaks more often come from the buy side, rather than the sell side, and there’s normally a nod and a wink from the acquirer to the banker before they happen. If Larry Page made it clear that he didn’t want such shenanigans going on around his biggest deal ever, then that would probably have sufficed to shut them down.
And then there’s the more general decline of the scoop ecosystem. No longer is it possible to control the way that a story is received by leaking it strategically for prominent placement on the front page of the WSJ or NYT or FT. All those publications will put the news online first, it will instantaneously get disseminated across hundreds of news sites, and the resulting front-page story — if it even makes the front page, seeing as how it’s now commodity news — will be reported out rather than a single-source affair.
Right now, there’s a vacancy in the scoops market: there’s generally been one go-to reporter on the M&A beat, and there isn’t one any more. Steve Lipin gave way to Sorkin, and Sorkin has now largely given up his scoopmongering for grander jobs as a book author, newspaper columnist, website editor, and TV anchor. But maybe Sorkin will be the last of the breed. Mike Arrington still gets a lot of scoops in the tech world, but the big M&A scoops from Wall Street just don’t seem as important any more, thanks largely to the speed of the internet.
Sorkin’s Dealbook was clearly set up to bring together a large number of excellent financial journalists who care about this kind of thing and who can deliver scoops — but it hasn’t done particularly well on that front. Wall Street bankers don’t care half as much as Silicon Valley dealmakers do when it comes to the most important blogs in their area — but they know that the era of the important front-page newspaper M&A scoop is largely over.
So while it’s still possible that someone new will come along and inherit the mantle that Lipin passed to Sorkin, I’m not holding my breath. And maybe that’s a good thing. Because it might free up precious journalistic resources to concentrate on real enlightenment, rather than evanescent exclusivity.