Opinion

Jack Shafer

Serving up the Supreme Court dough before it’s baked

Jack Shafer
Jun 28, 2012 21:07 UTC

Go ahead and ridicule CNN and Fox News Channel for fumbling the Supreme Court ruling (pdf) in the Affordable Care Act case today by reporting that the law had been struck down. If news organizations are going to crow about their breaking news scoops – Bloomberg News is bragging that it beat Reuters to the court’s decision by 12 seconds – they must submit to vigorous fanny-whackings whenever they perpetrate “Dewey Defeats Truman”-style mistakes. Tweets from the Huffington Post’s politics section, Time, and NPR got it wrong, too.

At least CNN and Fox only got it wrong one way. The Chicago Sun-Times erred at least four ways, posting to one Web page last night its preliminary coverage and headlines – ”Supreme Court strikes down health care law,” “Supreme Court waters down health care law,” and “Supreme Court upholds health care law,” and “Supreme Court XXXX Obama health law.” To be fair to the Sun-Times, every news organization pre-bakes as much coverage as it can when covering court decisions, elections, conventions and other scheduled news events. They write obituaries of the famous and old before they die. Pre-baking isn’t restricted to journalists. Even President Barack Obama stockpiled multiple speeches to cover three possible outcomes, he’s just lucky that he didn’t give the wrong one.

I suppose you could toss out my preconception theory and blame the errors on the continual acceleration of the news and the increasing pressure to get it first. But then you’d have to explain why Bloomberg News, Reuters, the Associated Press, and Dow Jones got it right inside the same instant news cycle.

Still, all journalism is vulnerable to error, so I forgive CNN and Fox for their breaking news transgressions. When the fog of breaking news descends, journalists often go blind or see stuff that isn’t there, a point I previously made after rewinding and reviewing the breaking coverage of the Mumbai massacre and the killing of Osama bin Laden. The early news accounts of those events disagreed violently with one another, in part, because of the chaos and the limited access to the scene. But it was also inherently flawed by preconceptions that journalists bring to every story. Reporters carry wads of pre-baked story dough to almost every breaking news story, whether it be a terrorist attack on a city or the scheduled release of a Supreme Court decision.

Obviously journalists must tote some preconceptions if only because blank slates make awful reporters. The problem comes when reporters become trapped by their preconceptions. Today, every news organization in the land knew that the Supreme Court’s decision was not limited to the simple binary of upheld or ruled unconstitutional, as the itchy fingers at the Chicago Sun-Times proved with their blunder. I’m sure that the reporters at CNN and Fox knew that, too. Perhaps they were overinvested in preconceptions about the outcome and jumped on the first confirmation they saw. That miscue was as understandable as it was avoidable, as my Reuters colleague Erin Geiger Smith tweeted shortly after the CNN and Fox screwup: “Was easy to get this wrong if you weren’t careful. Opinion headnote gives the commerce clause note first, tax on next page.”

Why leaks are good for you

Jack Shafer
Jun 27, 2012 22:16 UTC

Every leak of classified information benefits somebody. With maybe one exception, I’d say that the recent sluice of leaks that has opened up and been reported in the press benefits you.

Let me explain. Wall Street Journal columnist Peggy Noonan recently theorized that the press disclosures about U.S. cyberattacks against Iran and about American drone warfare were leaked by the White House to portray Barack Obama as a decisive wartime president to aid in his re-election. That an administration might leak national security information for political advantage is no fantasy: In 2006, the Los Angeles Times documented several examples of President George W. Bush’s administration leaking classified material to change public sentiment in his favor.

But Noonan’s reductionist thinking fails to explain last month’s messy leak in the underwear bomber plot. That particular leak blew a double agent’s cover, endangering the agent’s life and benefiting the White House in no way.

The leadership lessons of Chairman Rupert

Jack Shafer
Jun 26, 2012 19:56 UTC

This piece originally appeared in Reuters Magazine.

Rupert Murdoch has endured more crises during his 80-plus years than Richard Nixon and Odysseus combined, so the CEO and chairman of News Corporation can be forgiven for seeming nonplussed by his current predicament. He took over the family newspaper business in Australia at 21, when his father died, and expanded it. He fought the British unions in 1986 and won. He repelled the bankers in 1990, when he was close to insolvency. He has survived two divorces, the purchase and sale of MySpace.com, a bunch of other digital disasters, and even the predations of John Malone, who threatens Murdoch family hegemony with his purchase of News Corp stock. And now, referencing his media empire’s latest fiasco, the British Parliament has deemed Murdoch “not a fit person” to run an international company.

If Murdoch were the sort of pompous captain of industry who collected leadership maxims, Look for Trouble would likely top his list. He craves competition, and has repeatedly bet his company on new ventures like 20th Century Fox, the Fox Network, NFL football and his satellite operations.

Most chief executives think rewarding stockholders is their primary job. Not Murdoch. The Murdoch family owns the controlling shares in the company, so the chairman can largely ignore Wall Street to pursue a strategy that stretches across decades, not quarters. Yes, he’s impulsive, but creatively so.

Turning the morning news into soap opera

Jack Shafer
Jun 21, 2012 21:50 UTC

Ann Curry, the second fiddle on NBC’s Today show, is apparently being shown the door. That news was broken yesterday afternoon by Brian Stelter, the prolific media reporter of the New York Times on the newspaper’s website, and that 1,100-word story earned prominent placement on Page One of the business section of this morning’s paper.

I’ll forgive you in advance if you don’t care whether Curry continues on Today or if you don’t care whether she finds a slot elsewhere in the NBC empire, just as long as you forgive me for not giving a fig either. It’s not that I dislike Ann Curry or Today‘s first fiddle, Matt Lauer, or even Today‘s morning-show competition. It’s just that I dislike the shows for being dulled-down messes of news, entertainment and talk. If I watch any of them, it’s by accident.

My lack of interest in the morning-show mix puts me in the majority. Today, which is usually the number-one-rated program, and ABC’s Good Morning America, which took that position a couple of times this spring, draw an average of fewer than 5 million viewers. The third-ranked show, CBS’s This Morning, pulls in a little more than 2 million viewers. In a country of 311 million, that’s minimal interest.

Jonah Lehrer’s recycling business

Jack Shafer
Jun 20, 2012 23:38 UTC

“Write every piece three times,” the late Richard Strout used to advise journalists who craved advancement in the profession.

Strout, who wrote the New Republic’s TRB column for four decades and worked 60 years as a Washington correspondent for the Christian Science Monitor, wasn’t calling on his colleagues to submit identical copies of their work to different publications for payment, as New Yorker staff writer Jonah Lehrer just got busted for.

Strout was more subtle. If, for example, you were a freelancer who had just penned a slice-of-life piece for the New Republic about a coal strike in West Virginia, the only way to earn back your investment of time on such a low-paying piece was to spin off a similar yet distinctive version, maybe to the Outlook section of the Washington Post. If you could reconstitute elements of the narrative into a work that fed the policy debate over unions, your efforts were legitimate. After satisfying those two outlets, a smart freelancer would shoot for the glossies with a big coal-strike feature, perhaps the New York Times Magazine or the Atlantic. Sometimes the publish-every-piece-three-times impetus has come not from writers, but from editors who, having seen a writer’s earlier work on a topic, wanted a localized version of the writer’s story.

Who jumped first from the newspaper sinking ship?

Jack Shafer
Jun 15, 2012 22:21 UTC

When did the ripe, bulbous, and gibbous newspaper bubble pop?

It was probably in the 1990s, when the business better resembled a cruising blimp than it did the dotcoms like Pets.com, Boo.com, and TheGlobe.com, which all went kerblewy around the turn of the century. Unlike the bombing dotcoms, the high valuation of newspapers was based on real, not imaginary profits, and the belief that the profits from these deals would extend for years, if not decades, into the future.

And such deals there were. The New York Times Co bought the Boston Globe for $1.1 billion in 1993. In 1997, McClatchy acquired the corporation that owned the Minneapolis Star Tribune for $1.4 billion and Knight-Ridder purchased the Kansas City Star and Fort Worth Star-Telegram (and two other smaller papers) for $1.65 billion. On the sidelines, newspaper consultant John Morton crunched the numbers and expressed the market consensus about these transactions in the headline for his January/February 1998 American Journalism Review column: “Expensive, Yes, But Well Worth It.”

Morton’s column provides no sense of the impending doom, no inkling that an entire industry is arrowing its way to a hospice, no clue that all these newspaper people have booked passage on a death ship. Even after the Hearst Corp ditched its San Francisco Examiner for a $660 million deal to buy the San Francisco Chronicle in late 1999, more happy talk ensued. If anybody cited Warren Buffett’s 1991 warning that newspapers had lost their special “franchise” value and that he wouldn’t be buying any more of them soon, I missed it.

What happens to Tribune after bankruptcy?

Jack Shafer
Jun 11, 2012 22:40 UTC

Choking softly on the wad of debt “rescuer” Sam Zell fed it, Tribune Co checked into a Wilmington, Delaware, bankruptcy court at the end of 2008. Now newly slimmed, especially after the payment of $410 million in legal and other professional fees, the much diminished patient is about to be released and turned over to its new owners, a group of banks and hedge funds. How diminished? At the time Zell acquired control in 2007, Tribune Co’s newspapers, television stations, other media properties and Chicago Cubs baseball franchise were valued at $8.2 billion. Reporting from court filings, Chicago Tribune reporter Michael Oneal put Tribune Co’s current value at about $4.5 billion.

That’s not a haircut. That’s a beheading. Some of that loss in value represents the sale (for $845 million) of Tribune’s Chicago Cubs operation in 2009, but still.

What will the likely new owners (JPMorgan Chase; Angelo, Gordon & Co.; and Oaktree Capital Management) do with the reconstituted Tribune Co? According to Oneal, who has been monitoring the ailing company’s vitals since before its bankruptcy, Tribune isn’t so sick that it must sell off all its parts immediately. But hedge funds and banks aren’t the best managers of media properties, and when combined with today’s declining market for media properties, those hedge funds and banks might want to put out a for-sale sign as soon as possible. I’m sure that if you were interested in Tribune’s 23 TV stations, which are valued at $2.9 billion, they’d meet you for coffee.

The great newspaper liquidation

Jack Shafer
Jun 5, 2012 22:53 UTC

In his 2004 book The Vanishing Newspaper: Saving Journalism in the Information Age, Philip Meyer imagined “the final stages” of a “squeeze scenario” by a newspaper owner who wanted to exit the business but didn’t want to actually sell the title: He would start charging more for his newspaper and delivering less, commencing the “slow liquidation” of his property. This slow liquidation would not be immediately apparent to observers, Meyer wrote, because the asset “being converted to cash” would be “goodwill” – the newspaper’s standing in the community and the habit of advertisers and subscribers of giving it money.

One reason an owner would want to extract a newspaper’s goodwill value before selling its physical assets – its real estate, presses, computers, trucks, paper, ink, etc. – is that traditionally, goodwill is where most of a newspaper’s value has resided. When Meyer asked two newspaper appraisers to estimate how much of a newspaper’s value was locked up in goodwill versus physical assets, both gave him the same answer: 80 percent goodwill, 20 percent physical assets.

Selling goodwill is a dangerous strategy because once sold, it’s difficult to reacquire. But a newspaper owner who feels trapped by losses and can’t find a new owner at what he considers a fair price may feel he has no alternative but to cheapen his newspaper bit-by-bit, month-by-month. He may explain the goodwill sell-off as temporary economizing to be reversed once business conditions improve, or even as the exploration of a new business model. Sellers of newspaper goodwill might protest that the financial losses they’re absorbing constitute a serious investment in the newspaper’s future, that they’re harvesting nothing. But don’t be fooled. If you’re winding your company down with no strategy to wind it up, you’re burning goodwill even if you don’t acknowledge it.

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