The evolution of Bloomberg News

November 19, 2013

Yesterday was a big day for layoffs over at Bloomberg, and Kara Bloomgarden-Smoke has the official memo from editor-in-chief Matt Winkler. In typical Bloomberg style, the defenestrations seem to be taking place in much the same way as they would on Wall Street, with reporters being escorted from the building, never to return. (Bloomberg has a formal policy that once you’ve left, even if your departure was not of your own choosing, you can’t come back.)

I got a phone call this afternoon from one Bloomberg employee of very long standing, who used terms like “Lord of the Flies” and “culture of fear”; he said that he had never seen anything like this during his long career at the company. Employees were even reportedly flocking to the local Starbucks to view the latest NMA video about Bloomberg News on their phones, because they didn’t dare watch it on their work computers.

If you take a step back from the chaos, however, it’s possible to see the beginnings of a deep change in how the Bloomberg newsroom is run. The message I’m getting from the layoffs is that Bloomberg is finally growing out of Winkler’s insecurities, and is beginning to shape the newsroom into more of a means to an end, and less of an end in itself.

To understand what’s going on, it’s important to have a vague feel for where the power really lies within Bloomberg LP. Winkler is undoubtedly a powerful man — he oversaw the rise and rise of Bloomberg News, and he is a close confidante of Bloomberg, co-writing Bloomberg’s autobiography along the way. But while Winkler is powerful, he’s no Tom Secunda. Secunda, a co-founder of the company, is the other Bloomberg billionaire, the man in charge of basically everything which makes money at Bloomberg. And Secunda is the opposite of a romantic press baron: all he’s interested in is profitability.

Winkler’s enormous achievement, of building one of the world’s foremost news organizations from scratch, required an aggressive, underdog spirit. Bloomberg News is a highly competitive organization, and Winkler wanted to beat everybody, on everything, all the time. His goal for Bloomberg News was always that it be faster, broader, deeper, more accurate, more trustworthy — on every story, compared to every competitor.

That goal, however, put Winkler at odds, to some degree, with Secunda, whose only priority is client service, and giving Bloomberg subscribers whatever they want. And it turns out that Bloomberg subscribers, although they definitely want market-moving news ahead of anybody else, are much less fussed about the broad mass of news stories which don’t move markets.

So while Winkler was building up a substantial investigative-journalism group, or creating the Bloomberg Muse franchise to cover the arts, Secunda was grumbling, asking why Bloomberg News needed to provide any of that kind of stuff. Couldn’t Bloomberg subscribers find just as good content in such areas from the New York Times wire, if they needed it? The answer, of course, was yes, but that was not an answer that Winkler ever wanted to hear: his competitive drive didn’t end at actionable news. He wanted to win everything, all the way down to sporting results and book reviews.

In recent years, Winkler has been losing a bit of his former power. New areas of editorial — most obviously Bloomberg View and Bloomberg Businessweek — have been set up largely outside his purview: while he’s nominally in charge of both, he has little actual control of either — as some of Businessweek’s most notorious covers will attest. And then, this summer, the Atlantic’s Justin Smith was hired to the newly-created job of Bloomberg Media CEO.

Smith’s main qualification for the job was that he took a company which was bleeding millions, and turned it into a profitable, digitally-savvy news organization. And while Bloomberg News doesn’t have a profit mandate — its main job is to provide news to terminal clients, not to be profitable in its own right — it was clear that Smith was being charged with making the organization rather less wasteful, and with ensuring that if Bloomberg was doing something, it was doing it for a good reason.

Thus was created a procedure which had never happened at Bloomberg News before. “We evaluated everything we’re doing,” said Winkler, in his memo, “to determine what’s working and what isn’t, with the single aim to ensure all we do has maximum impact”. No more would Bloomberg News try to beat everyone on everything: from here on in, it would concentrate only on those areas where it could really move the needle.

Put like that, it was pretty clear where layoffs would be coming. Bloomberg TV is watched by, to a first approximation, nobody — and loses more than $100 million a year. With costs so high and benefits so low, it was never going to maintain its former size. Bloomberg Muse created some wonderful content, but, again, almost nobody read it — and it was hard to make a case that it was producing extraordinary material that no one else could equal. And as for the investigative unit — well, investigations are part and parcel of any serious news organization, and Bloomberg News is nothing if not a serious news organization. But again, the unit was looking bloated, it wasn’t reaching a wide readership, and the terminal clients didn’t much care about what it produced. If they weren’t interested, then at the very least the investigations should have some kind of popular impact, and help to bolster the reputation of Bloomberg News within the global elite.

Thus did Smith give Josh Tyrangiel, the editor of Bloomberg Businessweek and one of the very few people inside Bloomberg News to have proven himself largely independent of Winkler, a broader remit, including pretty much all the problem areas: investigations, Bloomberg Muse, and — at least temporarily — Bloomberg TV as well. The pruning was severe, just as it was when Tyrangiel took over Businessweek. But Winkler is clear that even after these cuts, Bloomberg News is going to have a greater headcount next year than it did before this week’s firings. It’s still growing: it just no longer feels the need to try to beat every other media organization on things as peripheral to its terminal business as arts coverage and match reports.

All of this should make Secunda happy — while at the same time emphasizing the fact that Smith and Tyrangiel now have a significant degree of control over a newsroom which used to belong solely and unambiguously to Winkler. And while the Winkler regime had its idiosyncrasies, it didn’t pull its punches. Now, however, Bloomberg News is increasingly a direct threat to the success of Bloomberg LP, in a world where China represents the company’s biggest growth opportunity and just one of the two things that Mike Bloomberg has declared to be in his “long-range plans” after his successor’s inauguration as New York City mayor. (The other? Playing golf in Hawaii and New Zealand with Julian Robertson.)

This is the downside of having Bloomberg News act as some kind of service provider to the terminal-sales business: the terminal-sales business clearly wants to minimize the impact of any critical news articles about China. As Edward Wong reports:

Editors at Bloomberg have long been aware of the need to tread carefully in China. A system has been in place that allows editors to add an internal prepublication code to some articles to ensure that they do not appear on terminals in China, two employees said. This has been used regularly with articles on Chinese politics.

This is a textbook example of pulling punches: refusing to publish stories in exactly the country where they would serve the greatest purpose. I can’t imagine that Winkler would have initiated such a protocol: it serves no journalistic function. But it’s clear — for good and for ill — that Winkler no longer has the absolute control over Bloomberg News that he used to have.

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